As employers and insurers brace for the effects of the controversial Cadillac tax, Republican lawmakers are preparing to fight the provision once Congress is back in session.
The first to make a move may be Sen. Dean Heller (R-Nev.), as he plans to introduce legislation to repeal the tax in the Senate, according to the National Journal. In the private sector, an organization known as the Alliance to Fight the 40, which includes major employer groups and health insurer Cigna, has begun its lobbying effort against the tax by sending a letter to the House of Representatives.
The Cadillac tax, a provision of the Affordable Care Act, places a 40 percent tariff on individual plans that cost more than $10,200 a year and family plans that cost more than $27,500 starting in 2018. A recent Kaiser Family Foundation brief indicates that 19 percent of employers have a plan in 2015 that would exceed the $10,200 threshold, FierceHealthPayer has reported.
Because the tax is tied to the ACA, it is a tricky issue for both political parties, the article notes. The Cadillac tax is unpopular with unions, which are key Democratic constituents, though the provision is important to the party because it helps pay for other aspects of healthcare reform.
"Repealing it would be very expensive because Congress decided to use these funds to pay for care under the exchanges and Medicaid expansion," Dan Mendelson, CEO of Avalere Health, told the National Journal.
And while Republicans have vowed to continue their fight against the ACA, the Cadillac tax resembles conservative policy ideas for how to tax employer-based insurance. Further, if the GOP is successful in repealing the Cadillac tax, it could rob the overall repeal movement of some of its momentum.
To learn more:
- read the article
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