Big Labor Granted Reprieve from Cadillac Tax in Latest Health Care Agreement
Congressional Democrats spent much of last week meeting with President Obama and White House officials in hopes of coming to an agreement on health care reform. As a result of the meetings and lengthy negotiations with prominent members of organized labor, lawmakers and the White House did manage to reach an agreement on the taxing of so-called "Cadillac" health care plans, which could be crucial in reaching agreement on the overall bill. The agreed upon compromise on the excise tax would exempt more health plans from the tax by raising the threshold from $8,500 per individual and $23,000 per family to $8,900 and $24,000, respectively, before the 40 percent tax takes effect. Additionally, collectively bargained health care packages and coverage from state and local governments will be exempted from the tax until 2018, while non-union, non-government plans will be subject to the tax in 2013.
The changes are expected to result in a loss of $60 billion in raised revenue over a 10-year period. Republican legislators caution that this loss will largely be placed on the shoulders of non-unionized small businesses. Discussions will continue this week as both the House and Senate are back in session. Democrats still must work on agreements for abortion funding and immigration provisions. Congressional sources have indicated that some of the agreed upon portions of the reform may be sent piecemeal to the Congressional Budget Office for scoring in an effort to shorten the overall turnaround in analyzing the legislation.