McConnell/Schumer Shutdown Deal Delayed Obamacare’s Cadillac Tax

The continuing resolution that Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer agreed to included a two-year delay on the Affordable Care Act’s Cadillac Tax from 2020 to 2022, The Washington Free Beacon reported on Tuesday.

The so-called Cadillac Tax is a 40 percent tax rate on extremely expensive insurance plans valued at more than $27,500 for families and $10,200 for individuals. It’s a tax specifically aimed at insurance companies.

A 2015 study by the American Health Policy Institute found that 90 percent of employers were taking steps to cut benefits or increase prices to deal with the fallout from the Cadillac Tax.

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It’s called a “Cadillac” because the cars have always been a high-end luxury. The healthcare metaphor specifically originates in 1977, when a hospital administrator in Cedar Rapids, Iowa, complained that “every citizen demands Cadillac health care service and is not concerned about the Cadillac costs because in most instances the patient doesn’t pay this cost personally.”

The Cadillac Tax is so unpopular that even Hillary Clinton supported repealing it.

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