NEW YORK — Democratic presidential candidate Hillary Clinton is calling for the repeal of part the health care law, the “Cadillac tax” that’s unpopular with both large corporations and unions.
Critics say the tax will raise costs for consumers, while supporters see it as a brake on wasteful health care spending.
Clinton’s effort is part of changes she is proposing to “build on” the Affordable Care Act. On the campaign trail, she often praises the law but says she wants to expand cost savings and coverage benefits, particularly for middle-class Americans.
“Too many Americans are struggling to meet the cost of rising deductibles and (prescription) drug prices,” she said in a statement.
The tax, which takes effect in 2018, is opposed by unions, which caution it would raise health costs on their members. But it’s also a major way of funding health care law costs.
Last week, Clinton’s opponent, Sen. Bernie Sanders of Vermont, and seven other Democratic senators introduced a plan to repeal the tax.
The Cadillac tax was meant to discourage extravagant coverage, which experts say encourages overtreatment and adds to costs. But critics say it’s a tax on essentials, not luxuries.
A Kaiser Family Foundation analysis estimates that 26 percent of employers could face the tax in at least one of their plans in its first year. Nearly half of larger firms could face the tax that year, because many offer better benefits. Consultants say employers would try to avoid the tax by requiring workers to pay more in out-of-pocket costs.
The tax is 40 percent of the value of employer-sponsored plans that exceeds $10,200 for individual coverage and $27,500 for families. It is levied on insurers and health plan administrators, who are expected to pass it on to employers.
The Obama administration says critics overstate the potential impact of the tax.
