Oct 26, 2015
Auto companies and other employers are using Obama’s “Cadillac Tax” to attack workers’ health care benefits. It is an attack that will ripple through the entire working class.
The “Cadillac Tax” included in Obama’s Affordable Care Act is a 40 percent corporate tax that would be imposed on health insurance plans with a value over $12,500 for an individual and $27,500 for a family. These are the so-called “Cadillac” health care plans, plans with actual coverages with minimal deductibles and copays. Companies don’t want to pay the tax, so they want to cut the workers’ health insurance coverage and make them pay more.
The UAW International is helping them do it. The new Chrysler agreement gives the UAW leadership authority to help the company “find ways to lower health care costs” during the 4-year life of the contract.
What’s happening in auto is a harbinger of things to come for workers all across the country. Many employers are using the “Cadillac Tax,” which incidentally does not go into effect until 2018, as an excuse to cut health insurance benefits to their employees now. Ninety percent of large employers are taking steps to prevent their plans from triggering the tax in 2018, according to the American Health Policy Institute.
Supporters of these kinds of reductions use the term “Cadillac Tax” to imply that workers whose health insurance meets the threshold are somehow highly “privileged.” But these threshold levels lump in all kinds of costs associated with workers’ health care, including the costs of premiums paid by both the employers and all their employees, as well as contributions to health savings accounts and flexible spending accounts by both. So, even not-so-good plans will trigger the “Cadillac Tax.”
The “Cadillac” tax places the blame for rising health care costs on individuals, as if people make a habit of using health care frivolously. As if costs rise because people use their health care! Those who defend the tax conveniently leave out of the picture the exorbitant profits raked in by health insurance companies, the pharmaceutical and medical supply industries, massive hospital conglomerates, and even the banks and construction companies that profit from hospital expansion. The ACA and the Cadillac Tax do nothing to lower these costs. They just shift more and more of the costs to the workers themselves.
Corporations and the ruling class in this country have always opposed any attempt at true national health care. The Affordable Care Act (ACA), or “Obamacare” as it often is called, was designed by the health insurance companies themselves, and supported, in the end, by both of the bosses’ parties, the Republicans and Democrats. This is true no matter how much hay the Republicans have made with it for political purposes.
The inclusion of the “Cadillac” tax and the low penalties employers face for not providing health insurance to their employees means the politicians and the insurance companies designed the law to push workers out of employer-provided health care and into the individual health care “marketplace.” Their method for reducing health care costs is to make workers pay such high deductibles, co-pays, and co-insurance that many people will simply have to choose between going without needed medical care or paying for it themselves out-of-pocket.
The bosses’ growing campaign to cut worker health care benefits amounts to one massive pay cut. Increasing premiums, co-pays, co-insurance and deductibles could mean costs of tens of thousands of dollars or more dumped on the backs of workers. Medical costs already account for the majority of personal bankruptcies. Imagine how many more we can expect with this drive to cut workers’ health benefits.
Health care should be a right, not reserved for the few who can afford to pay out of their own pockets. Whatever employer-based health care benefits workers have, they were the results of fights made by the working class in the past. We need to fight to take the profits out of health care, and until that happens, make the bosses pay!