Albuquerque Journal: Op-Ed: ‘Cadillac tax’ could eliminate some health coverage

By:  U.S. Senator Martin Heinrich

The landmark reforms in the Affordable Care Act have given thousands of New Mexicans access to quality, affordable health care for the first time in their lives. But even the strongest supporters of the law know it isn’t perfect and that there are some parts that need to be fixed.

The so-called “Cadillac tax” is one of those parts.

This tax – which will go into effect in 2018 – was meant to help pay for other parts of the ACA by charging a 40 percent tax on the highest-cost employer-based health plans. It was supposed to target only expensive health plans, the Cadillacs on the health care highway.

In practice, however, the tax will be more of a “Ford Focus tax.”

It will impact middle-class families who, for reasons outside of their control, have health plans that already or soon will reach the policy’s cost limits. The tax will force many employers to pay steep taxes on their employees’ health plans and flexible spending accounts, and possibly eliminate some employer-provided health coverage plans altogether.

That is why I am joining my Republican colleagues Sen. Dean Heller of Nevada and Sen. Orrin Hatch of Utah in sponsoring bipartisan legislation to repeal this tax.

There are better ways to pay for the overwhelmingly good things in the ACA, like tax credits to help those who cannot afford insurance. Doing away with this onerous tax on employees’ health coverage before it goes into effect will protect important benefits for workers, and ensure businesses and families get a fair deal.

I have always opposed this tax on the middle-class and I worked to strip it from the ACA when I was in the House of Representatives. In New Mexico, labor unions, small-business owners and municipalities all oppose the tax.

In the past, I have taken the lead on other commonsense fixes to the ACA. In 2010, I led the fight in the House to extend coverage through age 26 to children in military families covered by TRICARE, just like the ACA afforded civilian families.

And, after hearing from many small businesses in New Mexico, I helped lead efforts to repeal the unnecessary Form 1099 tax-reporting requirements for businesses.

I am proud of the ACA. Before we passed health care reform, New Mexico had the second-highest rate of uninsured citizens in the country – more than 20 percent of New Mexicans lacked coverage. Last year, New Mexico’s rate of uninsured people dropped by 4.9 percent, meaning at least 100,000 more New Mexicans are now covered.

The fundamental principles of the ACA are sound. We all need to recognize that most of the law is working as intended and that it is here to stay. I will continue working with colleagues from both sides of the aisle to make practical and sensible improvements to the law.

Republicans and Democrats both need to put partisan politics and grandstanding aside, and remember why Congress passed the ACA in the first place – to expand access to quality health care for all Americans – and work together to produce pragmatic policy that helps us achieve that goal.

You can always count on me to seek bipartisan, results-oriented solutions to the pressing challenges we face, and making the ACA work for New Mexico families is no exception.