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Life Health > Health Insurance

Hillary Clinton backs PPACA Cadillac plan tax repeal

By Allison Bell

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Hillary Clinton, the leading candidate for the 2016 Democratic presidential nomination, said today that she wants to repeal the “Cadillac plan tax.”

The tax, part of the Patient Protection and Affordable Care Act of 2010 (PPACA), is set to impose a 40 percent tax on high-cost plans starting in taxable years starting after Dec. 31, 2017.

Clinton said she supports PPACA and wants to strengthen it.

PPACA “has extended quality, affordable health insurance to millions of Americans, begun to rein in the growth of overall health care spending across the country, and provided important new protections to consumers, especially young people and anyone with a pre-existing condition,” Clinton said in a statement about her decision to support Cadillac plan tax repeal. “President Obama doesn’t get enough credit for this historic achievement, and Republicans’ obsession with repeal is dead wrong.”

But Clinton said families with health coverage are already struggling to pay their out-of-pocket costs.

She said other changes she has proposed, such as new efforts to hold down the cost of prescription drugs, will lower overall health care costs enough to cover the cost of repealing the Cadillac plan tax.

Supporters of the tax have argued that it could be powerful health care cost control mechanism. The current unlimited group health premium tax exclusion encourages employers to offer health coverage, but it also encourages them to offer overly rich plans, and for the employers and their employees to ignore the true cost of health care, tax supporters say.

The excise tax could compensate for the effects of the tax exclusion, by giving large employers and their employees a financial incentive to do more to hold down the cost of care, the supporters say.

Large employers and unions have argued that the tax will be much more expensive for employers than PPACA drafters realized, and that the tax will be difficult for employers to implement.

See also: IRS sees PPACA Cadillac plan tax hot potato and PPACA Cadillac plan tax pie: Hard to slice?

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