Just as President Barack Obama got his health care reforminitiative started, a key point of controversy during his campaignagainst Sen. John McCain reared its ugly head–the notion thatemployer-paid coverage should no longer be tax-exempt. That's boundto create a political backlash with voters, and it might promptwider support for a single-payer system.

Stirring the pot was a March 12 story in “The Washington Post,”headlined: “Workers' Health Benefits Eyed for Taxation” (clickhere for the full article).

While President Obama and Sen. McCain clashed during last fall'spresidential campaign on this touchy subject, Republicans are notthe only ones raising the possibility of slaying this sacredcow.

As the Post reports, “in recent weeks…Sen. Max Baucus, D-Mont.,chairman of the tax-writing Finance Committee, has repeatedlyadvocated changing tax laws to include employer benefits…Meanwhile,13 other senators–from both sides of the aisle–have signed on to aplan for universal coverage that includes a tax onemployer-provided benefits.”

President Obama, despite dismissing the idea during the campaignas a major middle-class tax hike, “hasn't slammed the door on it,”notes the Post. In fact, White House Budget Director Peter Orszagsaid taxing employer benefits was among several ideas that “mostfirmly should remain on the table,” the Post reported.

“Some congressional Democrats say the White House has signaledthat Obama would accept a tax on employer benefits as long as hedidn't have to propose it himself,” the Post wrote.

While President Obama recently proposed setting aside $634billion to help finance wider health insurance coverage, where hemight raise that kind of money is far from settled. The huge,untaxed funds spent by employers to cover their workers iscertainly a tempting target.

I don't think the average American worker has any idea how hugean impact this titanic shift would be for them financially. Theblow might be cushioned for lower-income workers via the kind oftax credit proposed by Sen. McCain during his campaign, but thefigure he floated would not come near covering the cost of mostplans now being offered.

This is the conundrum faced by anyone looking to account for the45-million-plus without health insurance in this country. How doyou pay for their care without taking something away from thosealready covered?

Those with coverage already often lay out thousands to covertheir portion of employer-paid premiums, along with co-payments,deductibles and out-of-network charges. If told they must now payincome tax on the full premium, many will not be able to pony up.In that case, they will either have to accept lesser coverage for acheaper price, or drop the insurance altogether, which would defeatthe purpose.

Despite all the tough talk reported in the Post, when push comesto shove, I cannot imagine Congress shrugging off the politicalfirestorm this idea will set off.

When voters get wind of how much more will be coming out oftheir pockets to pay for existing coverage, and once confrontedwith the option of having to accept a much inferior plan, most willbe furious. Will Congress have the guts to impose such a radicalchange in policy, public reaction be damned? I doubt it.

Indeed, if voters are told they will have to pay a huge tax billto keep their health insurance coverage, might the stage not be setto simply expand the payroll deduction for Medicare and create auniversal, single-payer system?

What do you folks think?