One of the most-debated provisions
of the finance committee's health care bill, to be voted on this
afternoon, is the tax on "Cadillac" plans. The plan would tax
expensive, "gold-plated" health insurance plans, which supporters say
would help control consumption and bring in billions in taxes. This
revenue, projected at as much as $200 billion over ten years, would
help fund health care reform, making it deficit-neutral or even reducing
the deficit. But taxes are never politically popular, and critics warn
that this one could raise premiums for more than just the rich.
- Brilliant Cap on Costly Over-Consumption A Chicago Tribune staff editorial applauds the plan,
noting that many Americans, especially those in unions with strong
bargaining power, have far more expensive health insurance than they
need. "Such lavish coverage invites people to overindulge in health
it's free, they'll get the necessary care and the unnecessary care. If
it's free, they'll order the brand-name drug instead of the
just-as-effective generic. If it's free, they won't think twice about
another trip to the doctor's office. That doesn't make them much
healthier, but it does drive up demand, and that drives health care
cost inflation for all of us," the write. "This page sets a high bar
for support of tax proposals. This meets the test."
- Won't Just Tax the Rich Robin Baker warns in the Huffington Post that more than just Goldman Sachs bankers could be affected. "Given
that the medical costs have grown between 7 percent and 10
percent over the last few years, it is possible that benefits in some
geographic areas could exceed the tax trigger by 2013. Those in
high-risk professions, such as firefighters and coal
miners, have higher utilization costs and would easily be subject to
the excise tax," writes Baker, Huffington Post blogger and health care
director at progressive think tank the Bell Policy Center. "As people
age, health care premiums increase and as premiums increase,
it is possible that those that did not exceed the threshold in 2013 may
be taxed in the future. The cost of plans could become a problem for
employers with an older workforce."
- Don't Rely on Cadillac Tax Revenue At Commentary, Jennifer Rubin points out
that the tax can bring in revenue or force employers to buy cheaper
care, but not both. "The tax really won't be paid, because employers
will start cutting
back on health-care benefits, say supporters of the scheme. Turning
Cadillac health-care plans into Yugo health-care plans won't be so easy
for unionized employers with collective bargaining obligations," Rubin,
a conservative blog for Commentary, writes. "And let's suppose all employers cut back so there aren't so many
Cadillac plans out there. Where is the money going to come from to pay
for the whole scheme?"
Want to add to this story? Let us know in comments
or send an email to the author at
mfisher at theatlantic dot com.
You can share ideas for stories on the Open Wire.