Because this exemption applies to employer-sponsored insurance but not individual coverage or out-of-pocket spending, it encourages group plans over consumer control. It should not be seen as sacred. However, the cap imposed by the Cadillac tax will become increasingly tight over time, which risks pushing Americans into public entitlements rather than empowering them as consumers. Policymakers should keep the Cadillac tax from biting too deeply — but a better way to end the tax bias toward employer-based plans would be to extend the tax exemption to health care that individuals purchase by themselves.
. . .
“The Trump administration’s action today is cruel,” said Democratic Congressman Frank Pallone Jr. of New Jersey. The new policy is “the latest salvo of the Trump administration’s war on health care,” according to a health-care advocacy group. “The pain is the point” of the policy, wrote columnist and economist Paul Krugman.
They were attacking the Trump administration’s decision last week to allow states to impose work requirements on Medicaid beneficiaries. But far from being a “cruel” action designed to inflict “pain” on the vulnerable, the administration’s decision is completely reasonable.
. . .
Due to the inexorable aging of the country—and equally unstoppable growth in medical spending—it was long obvious that health-care jobs would slowly take up more and more of the economy. But in the last quarter, for the first time in history, health care has surpassed manufacturing and retail, the most significant job engines of the 20th century, to become the largest source of jobs in the U.S.
In 2000, there were 7 million more workers in manufacturing than in health care. At the beginning of the Great Recession, there were 2.4 million more workers in retail than health care. In 2017, health care surpassed both.
. . .
The Trump Administration is on a mission to rescue health-care markets and consumers from ObamaCare’s shrinking choices and higher prices. Witness the Labor Department’s proposal to allow small businesses to band together to provide insurance on equal footing with corporations and unions.
The share of workers at small businesses with employer-sponsored health benefits has dropped by a quarter since 2010 as insurance costs have ballooned in part due to government mandates. About 11 million workers employed by small businesses are uninsured. Some businesses have dropped their workers onto state insurance exchanges where premiums are subsidized by taxpayers.
. . .
U.S. House Ways and Means Committee Chairman Kevin Brady said on Thursday getting rid of the so-called “Cadillac” tax on high-cost employer-provided health insurance could be part of the spending deal now under negotiation in Congress.
“We want to get rid of it,” Brady, a Republican, told reporters outside his office, adding that this could “possibly” be part of an agreement lawmakers are seeking to avoid a government shutdown on Jan. 19.
“Even Democrats who put that awful tax in place, believe it needs to be delayed. If we can find some common ground there that would be terrific,” Brady said.
. . .
In a bid to expand access to affordable healthcare coverage, the Trump administration early Thursday rolled out proposed rules that would allow more small businesses and self-employed workers to band together to buy insurance.
The rule is part of the administration’s objective to encourage competition in the health insurance markets and lower the cost of coverage. But some experts say expanding access to these “association health plans,” which aren’t subject to many of the same regulations and consumer protections as other health plans sold under the Affordable Care Act, could weaken the individual health insurance market.
ObamaCare’s “Cadillac tax” has emerged as a sticking point in bipartisan negotiations over delaying certain health-care taxes before the end of the year.
Democrats are pushing to delay the “Cadillac tax” on high-cost health plans, which is despised by unions, but Republicans are pushing back and have resisted including the Cadillac tax in the package, sources say.
. . .
As small business owners learn what their 2018 health insurance costs will be, some are considering providing different types of coverage for their employees.
Companies are receiving notices of premium and coverage changes for 2018. The changes vary, depending on factors including the state where a company is located, how many employees it has and how comprehensive its insurance is. But many owners are seeing rate increases of double-digit percentages, finding dramatically reduced coverage, or both. Health insurance consultants expect more owners to rethink their strategies beyond 2018 and choose alternatives like paying for claims themselves or adding health services that can lower costs.
. . .
The House and Senate recently passed tax reform bills because they successfully made the case that reform is a “once-in-a-generation” opportunity that is long overdue. It’s a compelling argument. When the last tax reform bill passed in 1986 the Internet was in its infancy and cell phones were the size of a briefcase. The world has changed, the argument goes, but our tax code has not.
What’s curious, however, is that the largest deduction in the tax code – the exclusion from income tax of employer-sponsored insurance, which dates back to the 1940s – is untouched by the reform bills. This omission is an enormous missed opportunity for American consumers and both political parties.
. . .
Anne Cornwell considered two drastic strategies in her quest to get affordable health insurance premiums last year for herself and her retired husband.
One was divorce. Another was taking a 30 percent pay cut. She chose the latter.
That maneuver slashed the premiums for the couple, who live in Chattanooga, Tenn., from exorbitant to economical. Instead of $2,100 a month — the amount she had been quoted for 2017 — their premiums are just $87 monthly, her lost income more than compensated for by qualifying for insurance subsides.
. . .