The Curious Politics of the “Cadillac Tax”

A provision of the Affordable Care Act popularly – or unpopularly – known as the “Cadillac Tax” is getting lots of attention now, even though it doesn’t take effect until 2018. Voices from both parties want quick repeal. And the politics are strange.

Briefly, the tax is a 40% excise on high cost health insurance policies that cost more than $10,200 for individuals and $27,500 for families in 2018. It’s 40% on the increment, so an individual policy costing $11,200 would cost an extra $400. It was included to help finance cadillacthe ACA’s cost and to apply pressure where it hurts the most to restrain the cost of health insurance.

When the ACA was signed into law in 2010, many critics asked: “where’s the cost containment?” One answer was: “the Cadillac tax.” The frequent response was derisive laughter: “The tax doesn’t hit until 2018 and it will be repealed well before then.” No laughter now. Continue reading “The Curious Politics of the “Cadillac Tax””