COMMENTARY: Cadillac tax set to hammer Nevada families

In just three short years, as many as 1.3 million Nevadans will have to pay substantially more for their health insurance or face losing coverage. That’s when the so-called “Cadillac tax” is scheduled to go into effect.

The Cadillac tax is a 40 percent tax on the cost of employer-sponsored health care plans above certain levels.

When the tax was created, it was aimed at wealthy individuals with gold-plated health insurance plans. But now, thanks to increases in the price of health insurance premiums as a result of Obamacare and the rising cost of health care, a huge number of insurance plans are considered “high-cost.”

Despite the tax’s name, it’s not just fat cats driving Cadillacs who will be on the hook. It will hammer minivan moms and other lower- and middle-class Americans by the millions.

Ultimately, the tax could impact nearly every person who gets health insurance through an employer.

Beginning in 2020, health insurance plans valued at more than $10,800 for individuals and $29,100 for family coverage will be subject to the 40 percent levy.

Because employers pay the tax, workers can expect higher deductibles and copayments, much more expensive premiums, and worse coverage if Congress doesn’t repeal the Cadillac tax. In fact, Marilyn Tavenner, the former head of Medicare, warned families would pay an average of $5,000 more for their premiums over 10 years.

The tax will disproportionately harm poorer Americans the most. Higher costs brought on by the Cadillac tax will function as an enormous tax increase for families as they face shrinking benefits and higher out-of-pocket costs.

More than 177 million Americans stand to pay more for their premiums, see their coverage drop substantially or both if the Cadillac tax goes into effect.

In Nevada, nearly half the state’s population will feel the squeeze. The state’s 167,000 casino workers will be affected, as will employees of Zappos, Amazon, Intuit and other large Silver State employers. Nurses, schoolteachers, local government employees and factory workers will all be harmed by the Cadillac tax.

Both Republicans and Democrats oppose the tax because it harms union workers, jeopardizes jobs and targets businesses. A survey by the International Foundation of Employee Benefit Plans found that 85 percent of employers oppose the Cadillac tax. It’s no wonder Donald Trump and Hillary Clinton both pledged to repeal the Cadillac tax on the campaign trail.

President Trump has indicated that he will sign any legislation that kills the tax — but it has to first get to his desk.

During the health care debate, Nevada GOP Sen. Dean Heller stood up for working Nevadans when he championed the only bipartisan amendment to pass, an amendment that fully repealed the 40 percent Cadillac tax.

Unfortunately, with health reform stalled, the tax is still hanging over Nevadan families.

By killing the tax before it goes into effect, Congress can save jobs, reduce the cost of insurance, protect quality health coverage and prevent a devastating blow to working Americans.

Lawmakers owe it to the 177 million Americans who will be harmed by the Cadillac tax to end it before it has a chance to begin.

Drew Johnson is a fellow at the Nevada Policy Research Institute.

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