There’s a bipartisan push to end the ACA’s ‘Cadillac’ tax

The ACA’s “Cadillac” tax on high-value health plans (soon to be average-value health plans if things keep trending the way they are) is under heavy fire from both Republicans and Democrats. 

Does this mean the excise tax — which is expected to affect most plans not long after it takes effect in 2018 — will never see the light of day? That’s a question still very much up in the air.

But three things are certain:

• Employers don’t like it.
• Business groups don’t like it.
• Some unions aren’t a fan of it either.

The tax’s biggest fans: Those on Capitol Hill desperate to find a way to pay for the ACA. But those people appear to be dwindling as it starts to become clearer what the effects of the tax will be.

Several new pieces of legislation have been introduced to repeal the Cadillac tax, and the bills have the backing of both Republicans and Democrats.

The most recent bill was introduced by Independent Senator Bernie Sanders (VT) and seven Democrat senators, including notable ACA-supporter Chris Murphy (D-CT).

A separate bill was recently introduced by Senators Dean Heller (R-NV) and Martin Heinrich (D-NM), along with similar legislation in the House by Rep. Joe Courtney (D-CT).

In addition to the repeal bills, a group of more than two dozen public and private employers, insurers and unions, have been pressuring Congress to kill the excise tax. The group is called Alliance to Fight the 40; a reference to the 40% Cadillac tax.

Under the ACA’s Cadillac tax provision, employers will be required to pay a 40% excise tax on the value of any healthcare coverage that exceeds $10,200 for single coverage or $27,500 for families in premium costs starting in 2018.

The biggest problem opponents of the tax have with it: With healthcare costs rising far more rapidly than inflation — which the tax’s health plan value limits are chained to — the tax will swallow up more and more plans year after year until, eventually, all but the cheapest health plans are taxed.