The White House, Democratic Leaders and Union Leaders have officially reached a “compromise” on the health care legislation. The “Labor Loophole” will make high cost insurance plans negotiated through collective bargaining agreements exempt from the tax until 2018. This means union health care plans that cross the $24,000 threshold won’t subject to the excise tax, but everyone else’s will. Democrats in Congress branded it the “Cadillac tax,” but that distorts the reality of who it will impact. This isn’t a tax on the rich; it’s a tax on people with expensive health insurance plans including the middle class, the old, and the sick. A New York Post columnist called it “a middle class time-bomb.”
Remember, this excise tax was also a revenue generator for the bill. The 40 percent tax on health care premiums would offset the costs of other portions of the legislation. With this significant change, the score (or cost) of the bill will increase. We should see their analysis next week.
Tags: cadillac tax, CBO, health care reform, middle class, Sen. Talent, tax