Another Special Interest Gets Sweetheart Deal in Health Care Bill

Curtis Dubay / January 15, 2010

After a long-week of negotiations, unions have won an exemption from the excise tax on high-cost “Cadillac” health insurance plans. The excise tax would fall on health insurance plans that cost more than $8,500 for individuals and $23,00 for families (the union deal reportedly slightly increases these thresholds) starting in 2013. It is one of the many tax hikes proposed by Congress to partially offset the cost of its take over of the health care system.

Under the terms of the deal cut between Congressional negotiators, union leadership and the White House, union members would not have to pay the tax until 2018 – although this could be extended in the future and further delay union members from paying the tax. This latest deal for a special interest further demonstrates that the push for health care reform has always been about politics – not the best policy for the American people.

If it had been about setting the right policy, Congress would have capped the unlimited income tax exclusion for employer-provided health insurance. A cap would have been the right decision from both a health care and tax policy perspective, but President Obama assailed it during the campaign. The excise tax is an inferior, roundabout way of capping the exclusion without explicitly doing so. (more…)