Wyoming’s U.S. Senators Mike Enzi and John Barrasso could soon help prevent 178 million Americans from having to pay significantly more money for worse health insurance. In the upcoming weeks they’ll have the opportunity to repeal the destructive “Cadillac tax” on employer-provided health coverage before it goes into effect.
The Cadillac tax is a 40 percent tax on the total cost of employer-provided health insurance plans and other wellness programs – including health clinics, screenings and weight-loss programs – offered to employees as part of their benefits package. Beginning in 2020, workplace health benefits with a total value (employer + employee cost) of more than $29,100 for a family or $10,800 for individuals will be subject to the tax.
Employers pay the tax, then pass the cost on to employees, either through higher deductibles and copayments, a smaller network and watered-down coverage, or eliminating spousal coverage or other benefits.
Congress passed the Cadillac tax to partially fund Obamacare. By taxing high-income Americans with particularly expensive health insurance plans, lawmakers believed they could generate revenue without impacting the middle- and working-class.
Boy, were they wrong.
Because of the increasing price of health care and insurance, even modest employee-sponsored health plans will be subject to the Cadillac tax soon after the scheme takes effect in just over 24 months. It’s expected that 178 million Americans will end up paying more money for less coverage.
Working-class Americans will be hit the hardest by the regressive new tax. Marilyn Tavenner, the former head of Medicaid and Medicare, estimated that families would pay $5,000 more for their premiums over 10 years. In total, a family of four earning less than $42,000 will spend an average of $1,261 more a year in health care costs as a result of the Cadillac tax.
Not surprisingly, the Cadillac tax is extremely unpopular. More than 80 percent of businesses and unions oppose the tax, and 71 percent of voters want Congress to repeal the tax, according to a poll by Public Opinion Strategies.
The Cadillac tax will particularly impact Wyoming. Because so many Wyomingites rely on their employers for their health insurance, 55 percent of Cowboy State residents will be harmed by the tax.
Workers at some of Wyoming’s most important employers, including Xanterra Parks and Resorts, Peabody Energy, Walmart, Decker Coal Company, Union Pacific, Halliburton and Sierra Trading Post could end up with less money and worse health care than they have today if the Cadillac tax goes into effect.
Thankfully, many elected officials in Washington are working hard to prevent that from happening.
Over 218 members of the House, including representatives from both parties and almost every state, have agreed to co-sponsor legislation to permanently repeal the Cadillac tax. During his campaign, President Trump pledged to sign any bill passed out of Congress that eliminated the tax.
Wyoming residents clearly don’t want a tax that will result in suffocating costs and jeopardize the health of their loved ones. In a few short weeks, we’ll learn whether Sens. Enzi and Barrasso hear our voices and repeal the Cadillac tax, or force us to accept inferior quality health care with a higher price tag.