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Opinion: Three Million Coloradans Will Pay More for Worse Health Coverage if the Senate Fails to Act

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PICT Bob Beauprez
Bob Beauprez

More than half of Colorado’s residents face the dismal prospect of paying even more than they do today for markedly worse health care if the ill-conceived “Cadillac Tax” on employer-provided health insurance is allowed to go into effect.

Fortunately, Colorado’s Cory Gardner has taken a firm stand against the tax in the U.S. Senate and is among the Congressional leaders working to send the scheme to the junk yard before it takes effect in 2022.

The Cadillac Tax was conceived as a way to force insured Americans to subsidize health coverage for the uninsured by hitting employers with a 40 percent tax on “high-cost” health insurance plans valued at more than $11,100 for individual coverage and $29,750 for family plans.

When the tax passed in 2010 as part of Obamacare, it was assumed those thresholds would apply only to high-end health insurance plans enjoyed by the wealthy. As it turns out, however, the tax will not just target those with so-called “Cadillac” plans, but it will hit minivan moms and pickup truck dads a lot harder than the one-percenters initially targeted.

That’s because a perfect storm of rising health care prices, costly regulations, and a lack of competition has caused insurance prices to skyrocket. Worse, the tax’s limits don’t increase with health care inflation. And employer-sponsored health programs like wellness and weight-loss classes, tobacco cessation, addiction assistance programs, and on-site medical clinics all count towards the tax.

As a result, employers who pay the tax will have to pass on the cost to individuals and families who receive health insurance through the workplace. They’ll be limited to painful options, such as hiking deductibles and copays, slashing benefits, eliminating spousal coverage, or worse-- limiting hiring.

Workers fortunate enough to hold on to their jobs and keep their same benefits will pay much more for their health coverage.

In fact, it’s estimated that a family of four earning $100,000 a year will pay about $3,500 more a year for health insurance if the Cadillac Tax goes into effect. A family of four earning less than $42,000 is projected to pay an additional $1,250 annually.

The Cadillac Tax would be disastrous for employers throughout Colorado – from small businesses with only a handful of employees, to the largest companies in the state, including Lockheed Martin, Molson Coors, Western Union, and Pilgrim’s Pride. Almost every union worker in the state would also be harmed by the tax and their long-negotiated benefits undermined.

There is a bit of good news, however, for the three million Coloradans who stand to pay more money for worse health insurance if the Cadillac Tax is allowed to take effect. The House of Representatives voted last month to repeal the tax for good – and the vote wasn’t even close. Ninety-eight percent of House members supported killing the Cadillac Tax.

But the Cadillac Tax repeal bill still hasn’t been scheduled for a vote in the Senate, and there’s speculation that our Senators may even wait until after next year’s elections to address the issue.

The 181 million Americans covered by employer-sponsored health insurance deserve better than having their health and finances thrown into limbo until the next Congress convenes in 2021.

Senator Gardner understands this and has made repealing the Cadillac Tax a priority. He deserves praise for standing up for all American workers by co-sponsoring legislation to permanently repeal the tax.

The rest of the U.S. Senate should take the cost and quality of Americans’ health insurance as seriously as Senator Gardner by joining the House and sending the Cadillac Tax to the scrap heap for good.

Bob Beauprez is a former United States Representative and Republican candidate for Governor of Colorado.