‘Soaring deductibles and medical bills are pushing Americans to the breaking point.” That was the take-away from a recent poll conducted by the Los Angeles Times and the Kaiser Family Foundation. The poll served as the backbone of the public campaign orchestrated by the newspaper and the left-leaning health care-focused nonprofit to justify and endorse a socialist-style “Medicare for all” scheme.
While the article argues for expanding the role of government in America’s health care system, it cleverly ignores that government is the reason insurance premiums and deductibles are skyrocketing in the first place.
In fact since Obamacare went into law, heavy-handed regulations have caused premiums for individual coverage to more than double, according to a study by the Heritage Foundation. The Los Angeles Times itself admits that since President Barack Obama took office, “annual deductibles in job-based health plans have nearly quadrupled.”
One of the most expensive and troubling aspects of Obamacare is the impending implementation of the Cadillac Tax, which threatens to destroy employer-sponsored health coverage, stifle health care innovation, and has already wildly increased Americans’ out-of-pocket health care costs.
Under the Cadillac Tax, the federal government will impose a 40 percent excise tax on all employer-sponsored health insurance plans, as well as workplace-provided health care and wellness programs, with a combined annual value of more than $11,100 for individuals and $29,750 per family.
The tax got its ill-fitting name because it was designed to be applied only to “overly generous” health care benefits as a way to fund subsidies for uninsured Americans. At the time Obamacare was passed, a $29,750 employer-provided insurance plan was considered a luxurious perk utilized by only wealthy Americans.
Unfortunately, thanks to those Obamacare-related increases in insurance prices, a workplace insurance plan worth more than $29,750 is now commonplace. The 2018 Milliman Medical Index found the total costs of “a typical family of four insured by the most common health plan offered by employers averaged $28,166.” By the time the tax is enforced in 2022, most working families’ health insurance plans will be subject to the Cadillac Tax.
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Americans will pay dearly for the Cadillac Tax in the form of higher costs and worse health coverage as employers attempt to avoid the tax.
The Cadillac Tax will hit Iowans especially hard. More than 55 percent of all Iowa residents receive their health coverage through an employer — the ninth-highest rate in the nation, according to the Kaiser Family Foundation.
If the Cadillac Tax is allowed to take effect, about 1.8 million Iowans will face paying more for inferior health insurance and less security for their families.
To make matters worse, because the tax is calculated based on the cost of insurance premiums, Iowans with the highest health care costs — older workers, individuals with a history of illness or disease, women, and people living in rural areas — will be hit the hardest.
Congress, aware of the dangerous impact of the Cadillac Tax, already voted to push implementation of the scheme back twice. It was initially to go into effect in 2018, but the implementation date is now 2022.
But these delays amount to little more than kicking the can down the road. Pushing back this terrible policy does little to help the 181 million Americans who fear their employer-provided health insurance may be wrecked by the Cadillac Tax.
Lawmakers on Capitol Hill shouldn’t fall for the government interventionist solutions concocted by the Los Angeles Times and the Kaiser Family Foundation to address the cost of insurance coverage and health care in America. The reality is that government is the exact reason health care expenses are through the roof.
The simplest way to stabilize the cost of workplace-provided insurance is to repeal the Cadillac Tax once and for all. Fortunately, Iowa’s U.S. senators are in a powerful position to make that happen.
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Sen. Joni Ernst has been a tireless critic of the Cadillac Tax and a reliable co-sponsor of bipartisan efforts to send the scheme to the scrapyard. As Chairman of the Senate Finance Committee, Sen. Chuck Grassley may single-handedly determine whether the Cadillac Tax is allowed to go into effect and wreak havoc on working Americans or finally gets the death it so richly deserves.
Iowa’s federal lawmakers owe it to the 1.8 million Iowans whose insurance coverage — and health — is on the line to make sure the Cadillac Tax is permanently repealed as soon as possible.
l Walt Rogers is deputy director of Tax Education Foundation of Iowa in West Des Moines.