Washington – Rep. Joe Courtney has plunged into the latest fight over the Affordable Care Act, attacking the so called “Cadillac tax” that will eventually be implemented on high-cost health care policies.
The ACA will impose a 40 percent excise tax on premiums over $10,200 per person and $27,500 per family. Although implementation of the tax has been delayed until 2018, companies are wrestling with it now as they plan employee benefits.
Unions, including the National Educational Association, who often have generous health benefits, oppose the tax, saying it’s already become a factor in contract negotiations.
Courtney, D-2nd District, on Tuesday introduced a bill to repeal the tax and is among a growing number of Democrats seeking to eliminate it, even as they support most other aspects of the ACA. About 60 House Democrats have co-sponsored Courtney’s bill.
To Courtney, the tax will hit many middle-income families in Connecticut because a high-cost policy is defined as the total cost of premiums. These can be high in areas where the cost of living and the cost of medicine are high.
He says it’s more of a “Ford Focus” tax than a Cadillac tax.
“The excise tax is not a smart reform. It is a flawed, one-size-fits-all penalty that will degrade workers’ benefits, lead employers to choose less comprehensive plans and force families to pay more out-of-pocket health care costs,” he said.
Those who have Cadillac plans often have low deductibles and broad benefits that cover even the most expensive treatments, but this is not always the case. Another factor that can boost premiums, besides the high cost of medicine, is the presence of many older workers in a company.
“The cost of health care remains one of the biggest challenges facing companies across the state,” CBIA President Joseph Brennan wrote in a letter supporting the plan. “The specter of the excise tax only adds to the difficulty in providing affordable comprehensive health benefits to their employees…”
Despite the support for a repeal by both business and labor, the Obama administration is expected to push back because it hopes to raise $80 billion over 10 years through the levy.
Courtney’s legislation would not designate a way to replace that lost money to the U.S. Treasury. But he said it doesn’t matter.
“The deficit benefit of this tax is not enough to justify keeping it on the books,” he said.
Courtney said he is speaking with several senators who are interested in introducing a repeal of the excise tax in that chamber. Rep. Frank Guinta, R-N.H., has also introduced legislation that would eliminate the tax.