Hillary Clinton: Repeal the Cadillac Tax

Labor, employer groups have opposed the tax

Democratic presidential candidate Hillary Clinton on Tuesday called for a repeal of the Affordable Care Act's (ACA) excise tax on high-cost employer-sponsored health plans.

About the Cadillac Tax

The ACA's so-called Cadillac Tax could create new pressures on employers' health costs. Starting in 2018, employer-sponsored health plans that cost more than $10,200 for individuals or more than $27,500 for families would be subject to a 40% excise tax on the portion of the amount that exceeds those thresholds. The dollar value thresholds would be adjusted annually based on the Consumer Price Index.

The Joint Committee on Taxation projects that the tax would bring in about $91 billion over the next decade. The tax was included in the ACA both to bring in revenue and to change employers' behavior—to prod them to offer health plans with lower premiums, which some say would help slow health care cost growth.

Because of the tax, more employers likely would offer plans with higher deductibles, and some companies already have altered their plans in advance of the policy taking effect, Laura Meckler and Stephanie Armour report for the Wall Street Journal.

Labor and employer groups have opposed the tax—and increasingly have support from lawmakers on both sides of the aisle. Last week, Democratic presidential candidate Sen. Bernie Sanders (I-Vermont) and 11 other Senate Democrats introduced legislation that would repeal the tax. There is also one other pending repeal bill in the Senate, and two pending standalone repeal bills in the House.

In addition, Rep. Paul Ryan (R-Wisconsin) on Tuesday including a repeal of the Cadillac Tax in a larger budget bill, which would also change other components of the ACA.

Clinton urges repeal

In a statement, Clinton said that while "the Affordable Care Act is working ... too many Americans are struggling to meet the cost of rising deductibles and drug prices," adding, "That's why, among other steps, I encourage Congress to repeal the so-called Cadillac Tax."

She also said that her health reforms proposed last week "would more than cover the cost of repealing" the tax. Clinton's campaign has said that her proposals would increase revenue by more than $100 billion over a decade if enacted (Lerer/Alonso-Zaldivar, AP/U.S. News & World Report, 9/29; Meckler/Armour, Wall Street Journal, 9/29; Faler, Politico, 9/29; Clinton statement, 9/29).

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