Newspaper article St Louis Post-Dispatch (MO)

Editorial: Democrats Could Kill Obamacare by Repealing 'Cadillac Tax'

Newspaper article St Louis Post-Dispatch (MO)

Editorial: Democrats Could Kill Obamacare by Repealing 'Cadillac Tax'

Article excerpt

It's unusual when Democratic presidential candidates Hillary Clinton and Bernie Sanders are on the same page as they compete for primary voters. It's even more unusual when labor unions and the U.S. Chamber of Commerce are singing the same song.

But the Affordable Care Act's so-called "Cadillac tax" is bringing these and many more disparate political bedfellows into unison. And people complain that President Barack Obama's policies are divisive.

Ordinarily, a coalition this diverse might be on to something. If so many people from so many perspectives hate this tax on high- cost, igh-benefit health plans, the policy must be misguided. Right?

Not really. Not if facts matter more that politics. Health care economists and policy experts believe the tax is one of the most important pieces of the Affordable Care Act not so much for the revenue it raises but because of the market behaviors it encourages, and discourages.

They argue that the tax will lead to reductions in health care costs in two ways. First, by encouraging employers to exchange higher-cost health benefits for higher wages. Second, by reducing overall demand for health care services especially services that cost a lot of money but don't do much to actually improve health care outcomes.

And then there's the revenue the tax generates. The latest estimate by the Joint Committee on Taxation is that the tax will raise $91 billion over the next 10 years. That's hardly chump change.

But that amount pales in comparison to the savings in health care costs the tax could generate by reducing the number of high-priced, comprehensive health plans and the high-cost, low-value use of the health care system they encourage.

A recent report by the Congressional Research Service says those savings could reach $40 billion to $60 billion a year by 2024. …

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