Health Care ‘Cadillac Tax’ Repeal Bill up for Vote Wednesday
Congress will be voting Wednesday on a repeal of what is known as the “Cadillac Tax”—a provision of the Affordable Care Act which would place a 40% tax on employer-sponsored health care plans which provide excess benefits.
The tax has been delayed twice in the past few years, but insurers have been preparing for its implementation in 2023.
If the bill passes, it would bring a moment of stability during a continuously unpredictable time in health care policy and politics.
Over time, insurers and employers have braced for the tax, by increasing the cost sharing of the employee or plan enrollee.“We are seeing the detrimental effects on the health care market already,” said NAHU Vice President of Congressional Affairs Chris Hartmann. “One of the things we’ve definitely seen is higher deductibles as everyone starts preparing for the Cadillac Tax to come into place.” The tax was created to help continue funding the marketplace and support enforcement of the health care law.
“Taxing workers trying to manage chronic conditions fails to address our most urgent health care challenges. At 40%, the tax is twice the top corporate rate and will have significant consequences. Waiting to address the tax forces employers to adjust benefits now in anticipation of the tax. Several studies have shown that the [tax would have a direct and negative impact on the continued affordability of employer-provided health insurance because employers will be compelled to reduce benefits and increase deductibles and other out-of-pocket costs to avoid the tax.”
