Up to 75% Could Be Hit by Obamacare Tax

Monday, 27 May 2013 04:27 PM

By Greg Richter

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The so-called "Cadillac Tax" facing employers who offer premium healthcare plans to their workers already is affecting employees, even though it doesn't kick in until 2018.

Employers say they have to get started bringing down costs now, The New York Times reports, so employees who are used to $20 co-pays at the doctor's office and $500 deductibles are learning a new reality. Many now are looking at deductibles as high as $6,000 for families.

That's exactly how Obamacare planners designed it, the Times story says. The intent of what is officially known as the Affordable Care Act all along was to get companies to drop plans that protect workers from the high cost of healthcare, which can lead to unnecessary tests and procedures.

"The consumer should continue to expect that their plan is going to be more expensive, and they will have less benefits," Cynthia Weidner of the benefits consultant HighRoads told the Times.

Editor's Note: Should ObamaCare Be Repealed? Vote in Urgent National Poll

Still, the tax is one of the most controversial parts of the healthcare law. It imposes a 40 percent tax on the portion of a health plan's cost that exceeds $10,200 for an individual and $27,500 for a family. That cost includes what both the employer and employee pay.

Some employees are feeling the pinch already. The Times talked to a nursing assistant who had to drop out of school and get extra jobs to pay for medicine for her husband, who has cystic fibrosis.

"My husband didn’t choose to be born this way," said Abbey Bruce.

“The reality is it is going to hit more and more people over time, at least as currently written in law, ” said Bradley Herring, a health economist at Johns Hopkins Bloomberg School of Public Health.

Herring estimated that as many as 75 percent of plans could be affected by the tax over the next decade — unless employers manage to significantly rein in their costs.



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