Sen. Dean Heller, R-Nv., says the “Cadillac Tax” contained in the Affordable Care Act is not only ugly and extremely unpopular but won’t generate anywhere near the money it’s supposed to.
That tax hits the so-called rich employee benefit plans with a 40 percent tax on all premium and other costs over a certain threshold.
Unless it’s repealed, he said he foresees public employees in Nevada losing health care, “and they’ll all get sent over to Obamacare.”
“A 40 percent excise tax is huge,” Heller said. “Seniors are going to get hit hard. Unions are going to get hit hard. Public employees are going to get hit hard.”
He said there isn’t a property on the Las Vegas Strip or business he knows of who supports the tax.
That’s why Heller and Sen. Martin Heinrich, D-NM, are pushing a bill that would repeal the excise tax altogether.
The tax was inserted into the ACA to help pay its costs — theoretically generating more than $80 billion a year.
Heller said that isn’t true: “It will maybe deliver $20 billion if nobody revises their plan. Where will that other $60 billion come from?”
He added of course every “Cadillac” plan would revise its costs and benefits downward to avoid the tax.
“That’s how the business world works,” he said.
Heller said public plans would be in the same boat.
Among the programs trying to deal with the tax is the Nevada Public Employee Benefits Program. Executive Officer Damon Haycock says the excise tax would hit the Nevada plan for nearly $1 million the first year (2018). He said the damage would more than double every year after that until 2022 when the projected damage would be $16.2 million.
The ACA imposes the excise tax on every dollar a plan costs over the threshold of $850 a month for an individual — both employer and employee costs as well as such things as contributions to Health Savings Accounts.
Haycock said while Nevada doesn’t hit that cost this year, it would by the time the law takes effect in 2018.
“This is a law that’s years old and doesn’t go into effect until after Obama gets out of office,” Heller said. “How bad is this when the president’s all for it and calls it his signature law but it doesn’t go into effect until after he gets out of office?”