?Almost as soon as President Barack Obama vacated the White House, Congresswoman Bonnie Watson Coleman voted to repeal a key provision for funding Obamacare and President Donald Trump signed it into law. http://clerk.house.gov/evs/201…
The lawmaker has responded to numerous details about her record by claiming the allegations are false, but the disputed reports contain links to source documents that seem to verify McCormick’s charges.
A key method of funding Obamacare was supposed to be a 40 percent excise tax on the most generous employer-provided health insurance plans that was set to go into effect beginning in 2018. http://clerk.house.gov/evs/201…
“This provision was often referred to as a ‘Cadillac Tax,’ because the health insurance policy was typically available to only high-end and overly-generous compensation plans,” said Democratic congressional candidate Lisa McCormick, who supports Medicare for All.?
McCormick said without the tax in place, Republicans have a stronger legal argument to kill off the program in the courts.
“Exempting health insurance from taxation costs the federal government nearly $250 billion a year and it’s regressive because it benefits people with higher incomes more than those who earn less,” said the challenger. “The Congressional Budget Office has estimated that the Cadillac Tax provision would generate $87 billion over ten years, by taxing the most expensive policies.”
“The Cadillac tax was to be a 40% tax on the most generous employer-provided health insurance plans — those that cost more than $11,200 per year for an individual policy or $30,150 for family coverage,” said McCormick, who explained that 40-years of tax cuts have opened a massive gap between the rich and poor in America. “It was a tax on employers that was supposed to take effect in 2018, but Congress has stopped its implementation. The was how President Obama intended to pay for the Affordable Care Act, but Trump and Bonnie scrapped it.”
After countless attempts by Republicans to repeal Obamacare, the House of Representatives, now controlled by Democrats, voted overwhelmingly — 419-6 — to repeal that part of the ACA entirely. A Senate companion bill was introduced with a total of 61 co-sponsors — more than enough to ensure passage.
The tax was always an unpopular and controversial part of the 2010 health law, because the expectation was that employers would cut benefits to avoid the tax. Still, Obamacare supporters believed the tax was necessary to help pay for the health insurance law and help stop the abuse of potentially unnecessary treatments.
“Support or opposition to the Cadillac tax was never broken down neatly along party lines because a lot of politicians do not want to pay for anything,” said McCormick. “Economists from across the ideological spectrum supported its inclusion in the ACA, and many continued to endorse it even as politicians scrambled to eliminate the funding as soon as President Barack Obama vacated the White House.” https://www.npr.org/sections/h…
“If people have insurance that pays for too much, they don’t have enough skin in the game. They may be too quick to seek professional medical care. They may too easily accede when physicians recommend superfluous tests and treatments,” wrote N. Gregory Mankiw, an economics adviser in the George W. Bush administration, and Lawrence Summers, an economic aide to President Barack Obama, in a 2015 column in The New York Times. “Such behavior can drive national health spending beyond what is necessary and desirable.” https://www.nytimes.com/2015/1…
A letter to the Senate on July 29 from health care economists and others argued that implementing it, instead, would “help curtail the growth of private health insurance premiums by encouraging employers to limit the costs of plans to the tax-free amount.” https://www.crfb.org/papers/le…
That letter also pointed out that repealing the tax “would add directly to the federal budget deficit, an estimated $197 billion over the next decade, according to the Joint Committee on Taxation.”
“Here’s another way to think about it,” says Jonathan Gruber, an MIT health economist, who has written at length on the subject of Health Care Reform. “We have a system where we bribe you to get employer-sponsored insurance. And the richer you are, the bigger bribe you get.”
Gruber explained that excluding the value of health insurance from federal taxes is a terrible idea, at least from an economist’s point of view.
“Congresswoman Bonnie Watson Coleman and President Donald Trump teamed up to repeal this key provision of Obamacare, because politicians are always eager to vote for tax cuts, no matter how much they hurt the working class,” said McCormick. “Unfortunately, when the rich do not have to pay, then you have to pay more.”
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