By Nancy Thorner and Ed Ingold –
While campaigning for the White House, President Obama promised to cut taxes for 95 percent of Americans. As he put it, “In an economy like this, the last thing we should do is raise taxes on the middle class.”
A plot is in play that will have a devastating effect on the working middle class, the so-called “Cadillac Tax” on insurance policies. The Cadillac tax will apply to employer-sponsored policies which are often union plans. These Cadillac plans cost about $23,000 for a family of four and $10,200 for an individual. Now there is a whooping 40% tax on all policies which have a value greater than about $12K.
Scheduled to begin in 2018, two years after President retires to Hawaii or wherever, the Cadillac tax is intended to do three things: 1) help finance the PPACA; 2) reduce overall health care costs; and 3) address the unequal tax benefit of excluding employer-based health insurance coverage from taxes.
While the intent of the Cadillac tax was to discourage people from selecting costly insurance policies, instead it may require ordinary Americans to pay even-greater sums for health insurance for which they could be penalized (taxed) for following the law.
It’s not surprising that once again Obama misled the public over an aspect of Obamacare. As Jonathan Gruber said in 2011, Obama’s architect and MIT economist, “We all know it’s a tax on people who hold those insurance plans.” The effect of this tax will be to destroy corporate health insurance benefits for the 60% or so of citizens who still have them.
The Cadillac tax looms large as it’s a departure from one of the biggest tax breaks in the entire code: that the federal government does not tax the value of health insurance provided by employers to their workers. Last year the Congressional Budget Office predicted that the tax would bring in $80 billion instead of $137 billion over the decade because of lower health spending and changes in the employer-sponsored insurance market. If so, employers would end up paying the tax and passing the cost onto workers.
Despite another promise made by Obama, Obamacare has not reduced the cost of health care as promised. On the contrary, Obamacare has nearly doubled the cost of insurance through mandates such as unlimited lifetime benefits and, most significantly, coverage of pre-existing conditions. Check here for a quick summary of ObamaCare’s Benefits, Rights and Protections.
Consider also that subsidies to buy insurance are given to nearly half of insurance purchasers (including illegal immigrants) at the expense of the other half who pay full cost. At a time when middle class Americans are struggling to pay the cost of health insurance, Barack Obama’s Health and Human Services Secretary Sylvia Burwell told a group of Latino bloggers in an online chat in November of last year, how the Obama administration wants to make Obamacare available for illegal aliens. Burwell further stated that no one in the federal government will ask applicants their legal status when purchasing Obamacare: “Everyone should come on, and folks should not be scared. No questions will be asked, and it is not about an immigration issue.”
Many Republican candidates for the U.S. and House promised that if elected they would vote to repeal Obamacare. During the week of February 1st the GOP House voted for a fourth time to fully repeal ObamaCare. But if repealed, what would replace it? Although the GOP has been scrambling for a replacement plan for years, the party remains divided over what should come next. Several committees in the House are working on a replacement plan, but no deadlines have been set to complete the work.
Discouraging, indeed, is that Senator Richard Burr (R-N.C.) said in an interview with Fox News on Thursday, February 5, that he did not believe Republicans would rally around a single alternative plan before the presidential election. Although the Supreme Case, King v Burwell, will be argued on March 4, which could eliminate insurance subsidies essential to the law, it is not wise for Republicans to put all their eggs into one basket. Republican voters, in general, want solution to problems, not just idle rhetoric and promises that don’t materialize. They want replacement legislation to fill the void should the Supreme Court vote to strike down Obamacare insurance subsidies..
In stark terms, the immediate effect of Obamacare, if allowed to continue unabated, is that benefits will be decreased to hold down costs, there will be higher co-pays, higher exemptions, and restricted health networks. Eventually these austerity measures won’t be enough, and companies will abandon benefits in favor of higher wages or subsidies so that workers can shop for benefits on their own. Here’s the rub. Benefits are not taxed at their value, so if they are eliminated in favor of higher wages, employees will be forced to buy insurance with after-tax dollars, which fall short by at least 30%, and even more in the absence of group discounts. Everyone but the super wealthy will be forced into government exchanges, at full retail.
As expressed by Jeffrey Cutler, tax collector of East Lampeter Township, Pa. who having lost his health insurance in October 2013, is now involved in a lawsuit that alleges Obamacare tax assessments against government agencies are unconstitutional.
This United States is currently the greatest beacon of freedom in the world. If we fail to challenge unconstitutional executive actions and laws, we risk the Every person in the United States that liked their old health plan better than their new plan but could not keep it is a harmed individual and deserves judicial relief.
There is still time to expose this fraud and repeal the most egregious parts of Obamacare, including Medical Device Tax, subsidies to the undeserving, gross expansion of Medicaid and not the least, the Cadillac Tax. We can’t all be that stupid.