Side Effects: Higher Health Insurance Taxes

Kathryn Nix / March 30, 2010

Union bosses howled about one Obamacare tax hike: the levy on “Cadillac” health plans (expensive plans rich in benefits). The problem with this tax, as they see it, is that it hits the very plans often enjoyed by their rank-and-file.

Ever eager to please the unions, Democratic leaders added a “fix” to the reconciliation bill the president will sign into law today (Tuesday). It delays the unpopular tax to 2018. The pols are touting it as a scaled back version of the tax. But even the “fix” is broken.

While the tax won’t bite until after the president leaves office, “scaled back” it is not. The revised version raises the threshold for plans that would be subject to the tax. But it also indexes the threshold to rise with the general inflation rate. (more…)