February 8, 2017
Republican lawmakers are currently developing a strategy to repeal and replace the ACA, but are debating which parts to repeal. “A new nationwide poll makes clear that the so-called 'Cadillac Tax' should be at the top of that list," said James A. Klein, American Benefits Council president. The findings show that voter support for repeal of the "Cadillac Tax" far outweighs the desire to implement it.
A new survey report
commissioned by the American Benefits Council shows clear, bipartisan support for repeal of the so-called "Cadillac Tax" on employer-sponsored health insurance coverage.
The "Cadillac Tax," enacted as part of the ACA, is a 40 percent tax on the cost of employer-sponsored health coverage that exceeds certain dollar thresholds starting in 2020. A new report from Milliman
shows that about 12 million people, or 11 percent of all employees plus their dependents, will be enrolled in plans that will be subject to the tax in 2020. That increases to 54 percent, or almost 59 million, in 2029. We also estimated that 16 percent of large employer groups will be subject to the tax in 2020 and 51 percent in 2029.
Republican lawmakers are currently developing a strategy to repeal and replace the ACA, and the Council is grateful that Senate Finance Committee Chairman Orrin Hatch (R-UT) told the U.S. Chamber of Commerce in a February 1 speech that all of the ACA's taxes should be repealed with the rest of the law. "After spending seven years talking about the harm being caused by these taxes, it's difficult to switch gears now and decide that they're fine so long as they're being used to pay for our health care bill," he said.
"Right now, lawmakers are debating which parts of the Affordable Care Act (ACA) to repeal," American Benefits Council president James A. Klein said in a media statement summarizing the results of the poll
. "A new nationwide poll makes clear that the so-called 'Cadillac Tax' should be at the top of that list."
The poll of 600 registered voters was conducted by Public Opinion Strategies, a widely respected national public polling firm, on January 4-6, 2017. A PowerPoint slide deck with the full results
is now available. The findings show that voter support for repeal of the "Cadillac Tax" far outweighs the desire to implement it. Among the most striking results:
- When given arguments to keep or repeal the "Cadillac Tax", voters favored repeal by a 2-to-1 margin, regardless of political persuasion.Voters agree the tax will compel employers to drop or reduce health benefits and they are skeptical that employers will raise their workers' taxable wages to make up for these reductions. (Slide 12)
- Bipartisan opposition to the "Cadillac Tax" increases as people learn more about it. Once informed about the tax, support for repeal rose to half of the surveyed population – including nearly two-thirds of Republicans and more than half of Independents – while support for implementation reached only 20 percent. (Slide 16)
- Repealing the ACA without also repealing the "Cadillac Tax" would be unacceptable for two-thirds of the respondents. (Slides 19 & 20)
- Voters are more likely to support their representatives' re-election if he/she voted to repeal the "Cadillac Tax." Perhaps most bracing for lawmakers themselves, voters are more likely to vote for their representative if they support the repeal of the "Cadillac Tax," no matter what party holds the seat. (Slide 10)
- In voters' minds, the best potential outcomes of the "Cadillac Tax" are the least likely to happen. Voters were generally dubious of assumptions that the "Cadillac Tax" would lead to reduced costs, higher wages and expanded coverage; but they expressed concern that it would lead to less employer coverage, fewer choices and higher out-of-pocket costs. (Slide 15)
based on the data, which we encourage members to share on social media, has been prepared by the Alliance to Fight the 40
, the diverse coalition of public and private employers, labor groups and patient advocates organized by the Council to repeal the Cadillac Tax.
As part of our comprehensive effort for repeal, the Council recently issued a letter of support
for The Middle Class Health Benefits Tax Repeal Act
(introduced as S. 58
in the Senate by Senators Dean Heller (R-NV) and Martin Heinrich (D-NM) and as H.R. 173
in the House of Representatives by Mike Kelly (R-PA) and Joe Courtney (D-CT)), which would fully and immediately repeal the "Cadillac Tax."
One concern is that GOP leaders could repeal the "Cadillac Tax" but replace it with a cap on the current-law exclusion of the cost of employer-sponsored health insurance from taxation. All of the credible Republican health reform proposals have included some reference to capping the exclusion, which is scored by the government as the largest driver of lost revenue in the federal budget. The Council recently hosted a webinar, The Latest: Potential Path Forward on Repeal & Replace
, to describe the many health policy elements currently under consideration in the House and Senate.
Both the Council and the Alliance to Fight the 40 strongly oppose any effort to tax employer-sponsored health care, whether through a tax on employers (like the "Cadillac Tax") or a tax on employees (like a cap on the exclusion). "Taxing health benefits doesn't save money, it simply shifts costs to working families," Klein added in the Council's statement.
For more information on health policy developments or the Alliance to Fight the 40, please contact American Benefits Council. Katy Spangler
, senior vice president, health policy, Kathryn Wilber
, senior counsel, health policy or James Klein
, Council president, at (202) 289-6700.