- - Friday, April 17, 2015

It’s already been established that the health insurance plans of 158 million Americans are in jeopardy because of a feature in the Affordable Care Act called the Cadillac tax. Even the media has started to catch on. The question is no longer if people are going to lose their company plans in order to finance the law, but only whether this is a design flaw or feature.

What lies ahead as we approach election season is the game of political hot potato. Blame, rationalization and deflection has already begun. Here’s how the game is played:

1. Deflect the blame onto the Evil Insurance Company — Jonathan Gruber, you may remember, is the Obamacare guru captured on video, repeatedly, revealing the strategy of popular deception built into the healthcare overhaul. Here, in this University of Rhode Island video, he does a wonderful job of explaining that the Cadillac tax surcharge is applied to the “evil” insurance companies, not the consumer, although we know that the charge will be passed down in the form of higher costs. It’s a “clever, basic exploitation of the lack of economic understanding of the American voter,” Mr. Gruber acknowledges. (Notice he’s not concerned about the American taxpayer or the American citizen. It’s the American “voter” that needs to be fooled.)

2. Blame your employer — As healthcare inflation pushes premiums toward the Cadillac tax trigger, employers are going to have to make a decision: Pay the surcharge, pass it on to you, reduce benefits, or just stop offering plans. ACA architect Ezekiel Emanuel previewed the Obama administration’s preferred spin in a revealing 2013 interview on “Fox News Sunday.” “Those are companies making decisions on how they want to insure people,” Dr. Emanuel told host Chris Wallace. “Look, the law does not say, ‘Sears, drop coverage.’ Sears decides what’s good for Sears. The law doesn’t say to the insurance industry, ‘You drop coverage.’ The insurance industry decides how it’s going to make money. When the private companies decide that they’re gonna drop people or put them in the exchange you blame President Obama. He’s not responsible for that.”

This claim is rich with irony, since Dr. Emanuel himself admitted/bragged during his 2014 book tour that he was the one who personally pitched the Cadillac tax to the president on a hot Friday afternoon in July, 2009.

3. Rationalize, using the “good policy” argument — The “good policy” argument goes like this: It’s cost control. Don’t we want people disengaged from the employer-based system? Companies don’t want to be bothered with healthcare management. Isn’t good to end the regressive tax exclusion and capture those tax dollars? Why would you defend an entitlement for the rich?

These are all excellent policy questions — to be debated and understood by the American people before the law was passed, not buried in the law, only to come to light years later when the Cadillac tax starts absorbing company plans. The key lesson learned from Hillarycare is that if the true policy discussion occurs before the law passes, it never passes. Having the policy discussion after the law passes is nothing more than a rationalization for hiding the clear intent of the law, i.e. to wipe people out of their company plans just as Hillarycare intended before it.

As progressive healthcare wonk Jonathan Cohn noted in January 2009, “You want to be able to tell people that have health insurance that they can keep it.” Fellow progressive Ezra Klein, in more colorful language, relates this back to the “golden rule” learned from Hillarycare: “You do not f— with what people have.” (That’s a verbatim quote, folks.)

And yet, Obamacare has done exactly that.

4. Deflect onto the GOP — Mr. Gruber once again shows how it’s done. “The real tension is on the Republican side,” he said earlier this month at the Sun Life Financial Wake Up Summit, “because a longstanding Republican position has been to get rid of the employer tax subsidy and put it onto the individuals instead. The Cadillac tax is heading in that direction. So the question is how does the Republican Party resolve its opposition in some sense to the fundamental employer system with the fact that this is the biggest thing we’ve ever done to try to get rid of something they’ve wanted to get rid of.”

Although not a single Republican voted for the law, and the GOP has attempted numerous times to repeal it — somehow they still own it. Nice.

As we get further down the road into presidential election season, the Cadillac tax is sure to be a focal point. It’s clearly designed to erode the employer market and raise a massive amount of taxes. How important is the Cadillac tax? It targets 10 times more American than are currently receiving subsidies through the exchanges.

Don’t be fooled by the spin. The reason why plans are being lost is because they were targeted for extinction by a purposeful design feature in the Affordable Care Act, the Cadillac tax. 

Richard Weinstein, MBA, is a certified financial planner in Westtown, Pa.


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