Cadillac Tax Delay (Climate of Health)

A two-year delay in the implementation of the so-called “cadillac tax” is a key piece of the new budget package the House and Senate are expected to vote on in the next few days. The much debated tax, which apples to high-cost insurance plans provided by employers to workers, was scheduled to begin in 2018. It is one of three changes to Affordable Care Act (ACA) taxes included in the new budget deal.

From the Washington Post:

Delaying the start of the Cadillac tax is widely regarded as the most important move because of the political dynamic that led to its inclusion in the deal and its potential impact on the U.S. health care system.

The White House opposes any repeal of this tax. Press secretary Josh Earnest reiterated that stance on Wednesday but said a two-year wait delay in its start would be “meager.” Meanwhile, some leading opponents of the tax said they would continue to press for it to be rescinded altogether.

According to a story in the Wall Street Journal, opponents see the two year delay as the first step toward killing the tax.

“We urge all members to support the delay and continue fighting for a full repeal of this costly measure,” said Chad Moutray, chief economist for the National Association of Manufacturers, within hours of the deal’s release.

US News & World Report says, “Employers have been scaling back medical coverage for years, shifting more of the direct costs to workers and their families through higher annual deductibles and cost-sharing. Increasingly, they have cited the Cadillac tax as a factor.”

However – an ABC News report suggests the delay doesn’t mean workers can expect to see any relief from rising costs for workplace health coverage.

“I wouldn’t expect companies to backtrack on changes to health insurance coverage that they’ve already made in anticipation in the tax,” said Larry Levitt, who tracks the health care law for the Kaiser Foundation.

Share your thoughts on the ‘cadillac tax’ and its delay. Let us know what, if any, effect you see it having on Arizona businesses and the workers who get their coverage through those businesses.

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