Support for 'Cadillac tax' running out of gas

The fallout from last month's election of Republican Sen. Scott Brown to replace the late Massachusetts Democrat Ted Kennedy goes on, with the so-called "Cadillac" tax its latest probable casualty.

The White House continues to push for passage of the tax--levied on high-cost, employer sponsored health insurance plans--but labor and congressional leaders express strong doubts, given that sweeping healthcare reform seems increasingly less likely, The New York Times reports. 

"It appears that the administration and Congress will be taking a much more modest approach to healthcare reform," said Larry Cohen, president of the Communications Workers of America. "The cost and value of such reform would not justify using an excise tax."

If passed, the agreement would create a tax on employer-sponsored health plans for 40 percent of the value of the plans where coverage surpassed specific thresholds. Several economists believe that such a tax would cause insurers to pass the costs along to workers. 

According to the president's Council of Economic Advisers however, such a tax would cause insurers to keep premiums low to avoid the tax, thus adding more money to workers' paychecks. 

To learn more:
- read this New York Times article

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