The Cadillac tax will not slow the growth of health care costs, but it will cost cash-strapped families, according to a new report from the American Health Policy Institute, a conservative think tank led by Tevi Troy, a former health official in the administration of President George W. Bush.
AHPI is adding its voice to an already-loud chorus of opposition to the tax, which will be levied on health plans worth more than $10,200 for individuals or more than $27,500 for families.
Most Republicans oppose the tax, along with many forces on the left, including labor unions, who fear the tax will lead to the end of generous employer-sponsored health benefits, and the two top Democratic presidential contenders, Hillary Clinton and Bernie Sanders.
According to AHPI’s survey of HR officials from large employers, less than a third (30 percent) said they currently had health plans that would be impacted by the tax. However, nearly half of employers without current plans subject to the tax said they believed that their plans would rise to the level subject to the tax by 2023.
Although the threshold for the tax will increase over time, it will be tied to general inflation, rather than the health-specific inflation, which is rising faster. Of course, if the Cadillac Tax works the way its proponents hope, the rise of health costs will slow down in the coming years.
If they don’t currently feel at risk, the Cadillac tax is clearly on employers’ minds. The survey found that 90 percent report taking steps to avoid the tax in the future.