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WGAW Calls for Repeal of Affordable Care Act’s ‘Cadillac’ Tax

The Writers Guild of America West is calling for the repeal of the so-called “Cadillac tax” on high-cost health plans, a feature of the Affordable Care Act that is set to go into effect in 2018.

The guild is citing the impact that the tax would have on member health plans.

Joining other labor groups, the guild sent a letter to Rep. Joseph Courtney (D-Conn.) in support of his legislation to repeal a 40% excise tax on the more expensive plans.

“The Tax will undermine the intent of the ACA by making health care less affordable for our members and the millions of Americans with employer-provided health insurance by forcing benefit cuts and increasing out-of-pocket costs,” executive director David Young wrote in the letter. “It will further shift the burden of rising costs onto workers while failing to address the root causes.”

The letter also took issue with the Affordable Care Act in general for not spurring competition among health care suppliers.

“The theory behind the Excise Tax is that individual Americans overuse health care,” Young wrote. “This is mostly wrong. Americans go to doctors and stay in hospitals less frequently than consumers in almost every other industrialized nation. It is the lack of competition among health care suppliers, an issue left unaddressed by the ACA or the Excise Tax, which drives costs.”

Courtney introduced his legislation earlier this year, noting that the healthcare law would impose a 40% tax on health insurance expenditures over $10,200 per person and $27,500 per family. The excise tax already was delayed for five years in 2010, and year-end budget negotiations in Washington could include some provision to delay it even further.

Yet supporters of the tax have said that it is an essential part of the financing for the healthcare law as well as reining in costs.

White House spokesman Josh Earnest said on Tuesday that they “strongly oppose the notion of repealing the Cadillac tax,” although he also said that the administration is “interested in working with Congress to strengthen the Affordable Care Act.”

Young warned that even plans offering relatively modest coverage could be affected, and that some employers would eliminate health plans altogether to avoid paying the tax. 

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