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Monday, May 23, 2016

Why Obamacare's "Cadillac Tax" is so Contentious

I have a new article at CBS MoneyWatch:

Why Obamacare's "Cadillac tax" is so contentious: President Obama's signature health care law is called the Affordable Care Act... One of its provisions that aimed at chipping away health care's high costs is a tax that attempts to remove a hidden subsidy for the most expensive employer-paid health insurance plans.
The highly controversial 40 percent surcharge on these plans quickly became known as the "Cadillac tax," but its implementation has been anything but quick: Congress has delayed its effective date from 2018 to 2020, given the misgivings many lawmakers have about its wisdom -- and possible effects. Indeed, it's not at all clear that the provision will ever become effective.
The Republican opposition is based upon the party's overwhelming aversion to everything about Obamacare, and the Democrats' resistance arises from concerns over how the tax will affect employee benefits. Unions are also concerned that health insurance benefit increases they've bargained for in lieu of wage increases will be lost.
Of course, economists have opinions on this topic as well, with a recent poll of economists finding strong support for the Cadillac tax on high-price employer-provided health plans.
The tax was intended to raise revenues to help fund Obamacare and, because it provides an incentive for employers to reduce their spending on health care, function as a cost-control measure. ...

    Posted by on Monday, May 23, 2016 at 06:23 AM in Economics, Health Care | Permalink  Comments (51)


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