Speaking of taxing “Cadillac” health plans, today’s New York Times reports that:
“The leading proposal in the Finance Committee would apply to family insurance plans that cost roughly $21,000 and up starting in 2013. For the sake of fairness, the threshold would vary based on geography and the average age of a company’s work force. In all, something like 10 percent of plans would be subject to the tax in 2013, according to the Center on Budget and Policy Priorities, a research group."
(The complete New York Times story can be found here.)
60% of the American public gets their health benefits through their jobs -- and they’re not “free.” According to the Kaiser Family Foundation, the average American worker with “employer-provided” healthcare pays about 41% of the cost.
So – will benefits be taxed before or after the 41%? Clearly the answer is – before.
And as everyone’s favorite economist, Robert Reich, opines, "According to the Congressional Budget Office, taxing all employee health benefits would yield a whopping $246 billion every year. Even limiting the tax to higher-income employees would go a long way to funding universal health care. Employer-provided health insurance is the biggest tax break in the whole federal income tax system.”
The AFL-CIO’s Gerald Shea, the union’s top healthcare lobbyist, sees the definition of “Cadillac” shifting with time, “People are going to see this as a huge middle-class tax hit.”
The New York Times agrees:
“ … the number of affected plans would grow over time. The Senate has been talking about having the threshold rise each year by the inflation rate plus one percentage point. Since medical spending has been rising much faster than inflation, more and more plans would probably cross the threshold in the years after 2013. Over the next decade, the Congressional Budget Office has estimated that the tax would pay as much as 25 percent of the cost of extending coverage to the uninsured.”
And so does Robert Reich. “So a sensible and politically feasible alternative is to limit tax-free employer-provided health benefits to workers whose incomes are under, say, $100,000 a year, and subject those with higher incomes to progressively higher taxes on them."
Can you say, “mission creep?”
“The leading proposal in the Finance Committee would apply to family insurance plans that cost roughly $21,000 and up starting in 2013. For the sake of fairness, the threshold would vary based on geography and the average age of a company’s work force. In all, something like 10 percent of plans would be subject to the tax in 2013, according to the Center on Budget and Policy Priorities, a research group."
(The complete New York Times story can be found here.)
60% of the American public gets their health benefits through their jobs -- and they’re not “free.” According to the Kaiser Family Foundation, the average American worker with “employer-provided” healthcare pays about 41% of the cost.
So – will benefits be taxed before or after the 41%? Clearly the answer is – before.
And as everyone’s favorite economist, Robert Reich, opines, "According to the Congressional Budget Office, taxing all employee health benefits would yield a whopping $246 billion every year. Even limiting the tax to higher-income employees would go a long way to funding universal health care. Employer-provided health insurance is the biggest tax break in the whole federal income tax system.”
The AFL-CIO’s Gerald Shea, the union’s top healthcare lobbyist, sees the definition of “Cadillac” shifting with time, “People are going to see this as a huge middle-class tax hit.”
The New York Times agrees:
“ … the number of affected plans would grow over time. The Senate has been talking about having the threshold rise each year by the inflation rate plus one percentage point. Since medical spending has been rising much faster than inflation, more and more plans would probably cross the threshold in the years after 2013. Over the next decade, the Congressional Budget Office has estimated that the tax would pay as much as 25 percent of the cost of extending coverage to the uninsured.”
And so does Robert Reich. “So a sensible and politically feasible alternative is to limit tax-free employer-provided health benefits to workers whose incomes are under, say, $100,000 a year, and subject those with higher incomes to progressively higher taxes on them."
Can you say, “mission creep?”
