Dems Renew Fight Against Tax On ‘Cadillac’ Health Plans

April 30, 2015

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Source: Las Vegas Review-Journal

A group of Democrats including Rep. Dina Titus of Nevada launched a bid on Tuesday to repeal a section of the health care law that will tax high-priced insurance plans starting in 2018.

The lawmakers sponsored a bill targeting the so-called “Cadillac tax” provisions of the Affordable Care Act. While it affects the rich who might enjoy gold-plated coverage, they argued the impact of the tax also will fall on the less well-to-do.

The tax would be levied on employers based on the cost of premiums for policies they provide their workers. Companies would be subject to a 40 percent tax on insurance costs over $10,200 for an individual and $27,500 for a family.

The Democrats say workers in higher-cost parts of the country such as the Northeast will feel the impact as employers scale back plans that approach the threshold. It also is expected to affect union workers who have negotiated generous policies into contracts.

“For companies that provide good insurance, for unions who have negotiated and accepted increases in health coverage instead of increases in wages, this comes back as a double hit on them,” Titus said at a Capitol Hill news conference.

The “Cadillac tax” was one of the parts of Obamacare that drew criticism from the Culinary union in Las Vegas when the law was being passed in 2010, prompting Titus and then-Rep. Shelley Berkley, both D-Nev., to join a coalition that tried to kill that part of it.

Instead, in negotiations on the final version of the health care law, the tax was held off until 2018.

Rep. Joe Courtney, D-Conn., said Tuesday the delay was “a truce and not a settlement.” He introduced a repeal bill with 64 co-sponsors, most of them Democrats.

Courtney said health care economists have concluded “far from being a Cadillac tax, which was a misnomer, the reach of this tax will be far and wide and it’s going to affect middle class people.”

Sponsors acknowledged the challenge of tackling the health care law, which remains a political hot potato, even to excise a single provision.

“At some point we have said all along this is not a perfect bill,” Titus said. “Like any major policy it needs to be worked on over time. (Democrats) haven’t wanted to open it up and Republicans just want to destroy it. Somebody has to take a step and say let’s start trying to make it better, and that’s what this is, I believe.”

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