2018 Obamacare: Higher Taxes, Less Insurance

Hank  Adler
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Posted: Aug 03, 2015 3:54 PM
2018 Obamacare: Higher Taxes, Less Insurance

Questions Number 1 & 2 for any campaign political debate: In 2018, the employers of tens of millions of taxpayers from union members to city employees to self employed individuals will face a 40% tax on health insurance benefits that are currently received by their employees tax-free. Will you attempt to repeal this tax or accept the reality that companies will be unable to afford to pay this tax and therefore healthcare benefits will be reduced or healthcare costs will be increased for tens of millions of Americans?

Federal Tax Day Reports last week: "The IRS has issued a notice intended to continue the process of developing regulatory guidance regarding the excise tax on high-cost employer-sponsored health coverage under Code Sec. 4980I, which applies to tax years beginning after December 31, 2017. Under Code Sec. 4980I, if the aggregate cost of applicable employer-sponsored coverage provided to an employee exceeds a statutory dollar limit, which is adjusted annually, the excess benefit is subject to a 40 percent excise tax."

So, it continues. Obamacare will cost working people more money and will result in tens of millions having less employer paid healthcare insurance. Period. Not a hypothesis, a fact. (The Cadillac tax is projected by Congress to bring $111 billion into Federal coffers between 2018 and 2022 unless employers determine to eliminate their Cadillac health plans. Every study indicates that most companies will not be willing and do not have the capacity to pay the 40% tax and will either reduce benefits or increase employee co-pays. It is incredibly unlikely that the government will see anything except a fraction of their projected $111 billion. (No one knows what will happen to cities and states where the 40% tax would likely be paid by the governmental agencies and either services will be reduced or local taxes raised.)

Obamacare will impose a 40% tax on 'excess' healthcare benefits provided to employees. Most large companies, union contracts and government entities provide coverage that by the Obamacare definition is "excess". What does that mean? My employer, a small non-profit university, has announced that it will need to cancel its long standing PPO plan because it will cost an $4 million in new taxes to the university every year. They do not have that $4 million and have no plans to reduce the quality of education or raise tuition being provided to our students to pay for PPO plans currently available to every employee. Couched this way, it is impossible to argue to the contrary. For me, it will mean losing access to a long time medical specialist. Obamacare: "keeping my old doctor" - That would be a no.

At the end of the day, what ism this is, socialism, communism, ismism, beginning January 1, 2018, workers will find a reduction to their healthcare insurance and/or higher individual healthcare costs. Only the cost of healthcare for individuals who work will be impacted. Think about this last sentence for a moment.

The Cadillac tax will increase insurance costs and/or healthcare costs for tens of millions of employees who today, have better health plans than they will have on January 1, 2018. Mr. or Ms. Candidate, will you in February of 2017 submit legislation to Congress to protect workers' health insurance?