The Affordable Care Act has helped 20 million Americans gain access to health care while controlling the growth of medical costs. Yet its foes in Congress have voted unsuccessfully dozens of times to repeal the law.
Obamacare opponents have found a new back door to try again to kill the law. Lawmakers are gearing up to repeal the so-called Cadillac tax on employers who offer high-cost medical plans to their workers.
The tax, which will take effect in 2018, is a 40 percent levy on the value of employer-sponsored health benefits of more than $10,200 a year for an individual and $27,500 for a family. It’s intended to discourage companies from offering overly costly health plans, which economists agree stimulate demand for health care and increase its expense.
Calls to repeal the tax have drawn support from a coalition of conservatives and unions. Labor officials say their members depend on generous health benefits to maintain access to medical care. But these arguments are shortsighted: The untaxed Cadillac plans can harm workers by driving up health care costs. Because health benefits are exempt from taxation, employers have an incentive to provide compensation in the form of more health insurance than their workers need, instead of higher pay.
The tax also will raise about $87 billion in revenue by 2025 to help pay for the ACA’s health-care premium subsidies for low- and middle-income families and for Medicaid expansion, according to the nonpartisan Congressional Budget Office.
Politicians must accept the health care law and its core components — including the Cadillac tax — as the baseline for reform. Then they need to get serious about the conditions required to build on its success: a universal right to health care, more transparency in medical costs and delinking employment from health insurance.
These policies, not more futile calls to dismantle Obamacare, would move the national discussion on health reform in the right direction.
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