National Consumers League

Cadillac-driven Health Reform


Health reform is – hopefully – in its final stages.  It’s cleared the House and the Senate, and we’re now faced with the “easy” task of conferencing the content of the two bills into one.  This bill will eventually be signed by the President; he hopes to have it on his desk and signed in advance of his State of the Union address in early February. Because the two bills differ a good deal, especially in how they aim to finance the coverage expansion, many ‘supporters’ have been at odds in recent months over how (and from whom) to obtain this money. One term that’s been tossed around – largely as a scare tactic from both sides of the aisle – is the “Cadillac Tax”.  The “Cadillac Tax” refers to a tax on expensive health insurance plans.  While some estimate this tax could generate as much as $150 billion over the next ten years, others fear that many will avoid paying the tax by switching to lower quality (and lower cost) health plans. The new deal being worked on by party leaders, the White House, and leaders from some of the tax’s biggest opponents – unions – would provide some exemptions to the tax, in addition to raising the income and health plan levels at which the taxes are imposed.  NCL is hopeful that as the deals continue to be made and the bill is finalized, that reform can be made without decreasing access to care or the quality of care delivered to Americans.