Obama to introduce changes to Cadillac tax with his 2017 budget plan
President Barack Obama has plans to introduce changes to the controversial “Cadillac tax” that was approved in late 2015. Unlike the name suggests, the Cadillac tax has nothing to do with auto insurance. Instead, it is focused on health insurance, particularly plans that are sold in the private market. President Obama is set to introduce the changes he wishes to make to the tax when he announced his 2017 budget plan next week.
Cadillac tax has been a point of contention for health insurance customers
The Cadillac tax imposes a tax on high-cost employer-sponsored health insurance plans. It was part of the Affordable Care Act, but federal lawmakers have only recently approved the tax taking effect in 2018. The tax itself has been a point of controversy for some time, with opponents suggesting that it will encourage businesses to make cuts to the health insurance plans that they offer to employees. Supporters of the tax note that it is expected to generate $87 billion a year in revenue for the federal government.
Changes to the tax include a higher threshold before the tax takes effect
President Obama’s reform proposal aims to reduce the financial hit of the Cadillac tax. This will be accomplished by raising the threshold before the tax actually takes effect. This would mean that the tax will only affect health insurance plans that are considered inordinately expensive. The government has not yet provided any concrete details concerning the changes that the President wants to make to the tax, but analysts suggest these changes will make the Cadillac tax less of a controversial issue.
Affordable Care Act continues to generate controversy
The Cadillac tax is part of the overall controversy surrounding the Affordable Care Act. The federal health care reform law has been heavily criticized by many government officials throughout the country who claim that it has only resulted in higher health insurance and medical costs. One aspect that the federal law has succeeded in, however, is that it has ensured that millions of people throughout the country have access to health insurance coverage that was not available to them previously.