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PAGE 2 | November 6, 2015 | NORTHWEST LABOR PRESS ... Rare bipartisan agreement to kill Obamacare’s ‘Cadillac tax’ From Page 1 ices. It’s an argument that ap- peals to health policy wonks … and Ivy League-trained econo- mists working for the White House. Out in the real world, workers with employer-provided cover- age are already paying higher deductibles and co-pays than ever. Deductibles have gone up by about $100 a year since Oba- macare passed in 2010. And any employer spending heavily on health benefits has already tried to put a lid on costs. Obamacare’s Cadillac tax will start on any employer health expenditures above $10,200 a year for single cover- age and $27,000 for family cov- erage. Those amounts include the total insurance premium, re- gardless of who pays it, plus any employer contribution to a Health Savings Account. The Cadillac tax may in fact stop employers from spending above those limits, but employ- ers will accomplish that by shift- ing the burden to workers. The number one way employers can reduce premiums is by increas- ing deductibles, co-pays and coinsurance paid by workers. Union employers can’t wait until 2018 to deal with it. They pay for health benefits under multi-year union contracts that are already being negotiated. How to avoid the Cadillac tax was a big factor in the tough bargaining that nearly led to a Longshore West Coast port shutdown. In Longview, Wash- ington, 800 paper mill workers struck for 12 days last month af- ter their employer, Kapstone, imposed health benefit cuts in the name of avoiding the tax. But the Obama Administra- tion appears to be standing firm in defense of the Cadillac tax. Jason Furman, chair of the White House Council of Eco- nomic Advisers, defended the Cadillac tax in an Oct. 7 speech at the Brookings Institution think tank, saying it will not only reduce health care costs and lower future federal deficits, but even boost workers’ wages and lead to more jobs. “Economic theory im- plies that the money employers save on health benefit costs as a result of the tax will be passed through to work- ers as higher wages.” —Jason Furman, Obama’s top economic adviser “Economic theory implies that the money employers save on health benefit costs as a re- sult of the tax will be passed through to workers as higher wages in the long run,” said Fur- man—a Harvard-educated multi-millionaire and son of a wealthy New York real estate in- vestor. Of course, economic the- ory also predicts higher wages as unemployment drops, and that’s not happening either. Kaiser Family Foundation CEO Drew Altman, in an Oct. 2 Wall Street Journal op-ed, pre- dicts that the Cadillac tax will hit low-income workers and the chronically ill hardest — be- cause it will cause employers to increase deductibles and co- pays. And actuaries from the consulting firm Milliman proj- ect that the tax will unfairly im- pact employers that happen to have lots of older workers, or that are located in the areas with the highest-price health care, like the Northeastern United States. One recent Milliman study reported that nearly 70 percent of variance in health in- surance premiums is explained by geographic location, while just 6 percent is due to the com- prehensiveness of the benefits. But AFL-CIO legislative rep- resentative Tom Leibfried points to signs that the Cadillac tax is losing support. Democratic presidential candidates Bernie Sanders and Hillary Clinton are in favor of repeal. So is Repub- lican presidential candidate — and newly installed House Speaker—Paul Ryan. And at least three pending bills in Con- gress would repeal it. A bill sponsored by U.S. Rep. Joe Courtney (D-CT), has 167 co- sponsors, including 20 Republi- cans [In Oregon, Peter DeFazio, Suzanne Bonamici, and Greg Walden are co-sponsors.]. The “Ax the Tax on Middle Class Americans’ Health Plans Act” by U.S. Rep. Frank Guinta (R- NH) has 106 cos-ponsors, all Republicans. And in the Senate, a bill by Sherrod Brown (D- Ohio) to repeal the Cadillac tax has 13 co-sponsors. Congress is too dysfunctional these days to pass stand-alone bills, but Leibfried thinks the proposal may gain traction as part of a larger bill later this year, such as a bill on “tax ex- tenders.” HOW TO ‘FIGHT THE 40 ‘ To pound the drums for repeal, unions have joined with employer groups and health care companies in a coalition called Alliance to Fight the 40, behind the slogan, “Stop the 40 percent tax on health benefits.” For in- formation about the campaign, and sample letters you can send to mem- bers of Congress, visit fightthe40.com.
