Democratic Support for ObamaCare Begins to Fracture: Clinton to Oppose Cadillac Tax

September 22nd, 2015

One of the points I am developing in Unraveled is that as we approach 2017, whoever is sitting in the White House will have to make serious decisions about how to alter Obamacare. The law, as it stands now, will be politically and economically unsustainable. One of the key decisions which I’ve chronicled at length focuses on the so-called “Cadillac Tax,” which puts a heavy excise on most generous health insurance plans. This will result in millions of Americans losing their policies, and being thrown onto the Obamacare exchanges. We’ve already seen some cracks forming on the left, as unions and other groups that depend on lavish health insurance plans, are pushing for its repeal. The New York Times has already editorialized in opposition to its repeal, explaining the law would be economically unsustainable without the funding provided by the Cadillac Tax.

Now Democratic-nominee Hillary Clinton has joined the fray.

Hillary Clinton will seek to align herself with ObamaCare’s successes and use it to attack the GOP on Tuesday as she begins to map out her long-awaited healthcare agenda.

The effort could also lead to a public break with the Obama administration on healthcare for the first time.

After months of delivering nothing but praise for ObamaCare, Clinton is expected to weigh in – and oppose – one of the law’s most controversial taxes: the so-called “Cadillac” tax.

If she joins her 2016 Democratic rivals in calling for the repeal of the tax on generous healthcare plans, she will distance herself from most ObamaCare supporters but also unlock key endorsements from unions that staunchly oppose it.

Clinton will drop the first details of her healthcare plan during a campaign event in Iowa on Tuesday, part of a two-day, three-state tour. Her speech will come a few weeks after hinting that she has concerns with the tax earlier this summer.

Clinton hinted earlier this summer that she was weighing a repeal of the excise tax “as currently structured,” which would charge companies if their benefits exceeds $10,200 for an individual or $27,500 for a family.

The controversial tax, which has been repeatedly delayed, is still three years away from implementation. It is increasingly drawing opposition from union groups and Democrats in areas like New England and the West Coast, where health insurance costs are higher.

“I worry that it may create an incentive to substantially lower the value of the benefits package and shift more and more costs to consumers,” Clinton wrote in response to questions from the American Teacher’s Federation this summer.


Bernie Sanders has also supported repealing the Cadillac Tax.

The article explains that Democrats remained hush about the Cadillac Tax years ago, but now that the law is settled, they can come out in opposition.

Four years ago, hardly any Democrats publicly supported repealing the Cadillac tax for fear it would spur on efforts to repeal the entire law. Now, the lobbyist believes the law is more cemented, and Democrats can afford to vocally oppose the most onerous pieces of the law.

“I think the thing that’s different now than it was four years ago is that the future of the [Affordable Care Act] is not in question. This isn’t about repealing the ACA,” she said.

Still, the Obama administration has fiercely opposed the repeal effort, arguing that there is no other way to fill the $87 million budget hole.

Eliminating the Cadillac Tax would pose a far greater funding crisis than the elimination of the individual or employer mandates–the law would lose billions of funding, and render any estimates of CBO budget neutrality an absolute farce.

Update: Fittingly, on Face the Nation, candidate Clinton repeated that the “debate over the Affordable Care Act is over.”

DICKERSON: And you’re going to talk about Obamacare this week, support it.

CLINTON: Yes, I am.

DICKERSON: What is the big new proposal you’re going to offer?

CLINTON: Well, first, let me say that it’s time that we say that the debate over the Affordable Care Act is over. The Supreme Court has twice upheld it, yet the Congress has voted more than 50 times to repeal it.

Let’s get beyond that. Enough is enough. And we need to strengthen it, not scrap it. It is the core of how we’re going to provide health care to Americans going forward, the 16 million.

But there are other benefits to it that people who are not on the exchanges are being able to take advantage of. You know, 158 million American women are no longer charged more for health care because of our gender. Young people can stay on their parents’ policies until they’re 26.

If you have a preexisting condition, insurance companies can’t shut you out. We have a lot of positives. But there are issues that need to be addressed. I’m going to address them this week, starting with how we’re going to try to control the cost of skyrocketing prescription drugs. It’s something that I hear about wherever I go. It’s part of the plan I will be rolling out in the next few days.

It isn’t. Not by a long shot.

Update: Here are the specifics from her speech:

After months of giving ObamaCare policies nothing but praise, Clinton criticized the law for the first time Tuesday, while revealing some details about how she plans to go beyond it.

“The cost of prescription drugs went up by over 12 percent last year. Meanwhile, other out-of-pocket costs are growing to, and insurance companies just keep raising the premiums,” she said. “For a lot of families, it doesn’t feel that healthcare costs are coming under control.”