Opposition to insurance tax grows in House

WASHINGTON (Reuters) - Opposition is growing in the U.S. House of Representatives to a proposal to tax high cost health insurance plans as a way to finance a sweeping healthcare reform that would provide medical coverage to millions of uninsured people, lawmakers said on Wednesday.

Heavy lobbying by labor unions against the proposed tax has help strengthen the opposition to the proposed excise tax, Representative Gerry Connolly told reporters following a closed door meeting of House Democrats on the proposed healthcare overhaul.

A letter signed by 156 Democrats urged House Speaker Nancy Pelosi to reject any excise tax on high cost health care plans.

"This letter should send a clear signal to House Leadership that an excise tax on health plans will be an additional and substantial tax burden on working families," said Representative Joe Courtney, who helped write the letter.

"A majority of Democrats believes that is the wrong direction for health care reform," he added.

House healthcare reform legislation is financed mainly by a proposed 5.4 percent surtax on the wealthy.

But legislation being considered by the Senate Finance Committee would impose a 40 percent excise tax on high cost medical plans. Pelosi has said House leaders were looking at the insurance tax as they work to merge three bills passed by House committees into a single proposal that can win at least 218 votes and pass the House.

More than 100 state and local union leaders have been visiting congressional offices this week to push for healthcare reform and voice opposition to the proposed high end insurance tax.

(Reporting by Donna Smith; Editing by Richard Chang)