The Cadillac tax is a surcharge on expensive health care plans, designed to raise revenue and, more importantly, to hold down spending on medical care. It became law as part of the Affordable Care Act and was originally scheduled to take effect in 2018. But the tax was almost instantly unpopular. In December, Congress voted to push back the introduction, and Obama reluctantly went along.
Now, the tax is not supposed to take effect until 2020. Most observers expect that, at some point, Congress will push back the starting date even farther into the future -- a pattern likely to repeat itself over and over again, so that the tax never actually takes effect.
But the administration isn’t quite ready to give up. The president’s budget, which becomes public on Tuesday, includes a proposal to modify the Cadillac tax in ways that would address several key objections to it. And while nobody expects Congress to act on the White House proposal this year, the proposal could start a conversation that carries over into the next administration.
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