Unions worry about 'Cadillac' tax on expensive health insurance

"Unions representing thousands of teachers and state and local government workers are bracing for the worst if Congress adopts a proposed 'Cadillac' tax on health insurance," Newsday reports. "The 40 percent levy on health care costs above $8,000 for individuals and $21,000 for families passed the Senate Finance Committee on Oct. 13. If the tax were to become law, experts said, government employees in New York would be hit hard because their powerful unions have negotiated benefits that go beyond medical and prescription drug coverage to include, among others, dental and vision." Although the tax would be paid directly by insurers, they are "expected to pass it along in the form of higher premiums, deductibles and co-pays." Some state government employees have plans that could fall into the "Cadillac" bracket.

"Supporters of the 'Cadillac' tax, proposed to take effect in 2013, said it would act as a brake on runaway health care costs," but opponents "said people with comprehensive insurance plans would be unfairly pitted against those with lesser ones, in order to pay for coverage for the uninsured" (Madore, 10/25).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.