- A senior White House advisor revealed President Obama wants to rejigger the ACA “Cadillac” tax to reflect regional differences.
- The proposal, part of the president’s fiscal 2017 budget plan, would raise the threshold for the tax in areas where healthcare is particularly expensive.
- Authorized by the Affordable Care Act, the tax was projected to bring in $87 billion a year.
The 40% excise tax applies to employer-based healthcare plans whose aggregate annual premium exceeds $10,200 for individuals and $27,500 for families. Opponents, including employers and a number of lawmakers have called for its repeal.
Writing in the New England Journal of Medicine, White House Council of Economic Advisors Chairman Jason Furman said the proposed regional focus “prevents the tax from creating unintended burdens for firms located in areas where healthcare is particularly expensive, while ensuring that the policy remains targeted at overly generous plans over the long term.”
The tax was intended to fund expansion of the ACA beginning in 2018, but the president’s year-end spending deal with Congress delayed its implementation for two years. The Congressional Budget Office estimates the delay will cost the program $17.7 billion over 10 years.