Both Parties Agree – Let’s Send This Cadillac To The Junkyard

Democrats and Republicans disagree so loudly and so often on so many issues that I suspect if a red-stater would point to the sky and say it’s blue, a blue-stater would insist that – no! - it’s green.

But there is one issue that leaders of both parties agree on. Wanna take a guess what it is? I’ll give you a couple of hints – it’s a tax and it has to do with health care reform.

Both Democrats and Republicans have joined their voices in disapproval of the tax on high-cost health insurance plans – often called the “Cadillac” tax. This tax on expensive health plans was created as part of the Affordable Care Act.

The Cadillac tax is a 40 percent excise tax on employer health plans that are considered generous. Employers would have to pay the tax on the value of policies above a certain cap. In 2018, when the tax was supposed to take effect, that cap was supposed to be $10,200 for an individual and $27,500 for a family.

Employers (a key GOP constituency) and unions (which usually lean Democratic) oppose the tax because they would have to cut back worker coverage – or even eliminate it – to avoid the tax. Even companies that have been offering wellness programs, health clinics and contributions to health savings accounts may have to take a second look at these activities because they factor into plan costs.

An estimated 74 percent of the nation’s employers will be hit by the tax by 2022, according to the United Benefit Advisors 2015 Plan Survey. Janet Trautwein, National Association of Health Underwriters CEO, summed it up recently when she said, “No amount of repair or polish can change the fact that this Cadillac is a clunker.”

The call for eliminating the Cadillac tax is actually the second issue that Democrats and Republicans have agreed on lately. Both parties are calling for a return in some form of the Glass-Steagall Act, which created a wall between traditional banking practices and riskier investment banking practices.

Both parties agreeing on something? These issues may not be dinner-table discussion topics in the average American home, but at least they represent a few points of near-harmony in a political world that gets more raucous by the day.