October 18th, 2009
11:38 AM ET
13 years ago

Obama aide defends tax on so-called 'Cadillac' plans

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/images/10/18/art.2rahm1018.cnn.jpg caption="White House Chief of Staff Rahm Emanuel discussed health care reform Sunday on CNN's State of the Union with John King."]
WASHINGTON (CNN) – As the debate over health care reform moves into a new phase, White House Chief of Staff Rahm Emanuel is defending one proposal to help finance the nearly $900 billion price tag for Democrats’ ambitious plans to restructure the nation’s health care system.

“This is basically one of the ways in which you basically put downward pressure on health care costs,” the top Obama aide said Sunday on CNN’s State of the Union. “The president believes . . . it is helpful in getting costs under control and it hits the insurance companies and the high expansive and expensive plans.”

The possibility of a tax on health insurance plans with higher premiums and better benefits is driving a wedge between Democrats and many labor unions who have been longtime political allies of Democrats. In addition to being concerned about a possible tax on so-called “Cadillac” health insurance plans, unions are also concerned that the final version of health care reform legislation will not include a public health insurance option.

Labor leaders believe a public option would help union workers in negotiations with employers in an environment where escalating health care costs have dampened wage increases. The unions oppose a tax on “Cadillac” plans because they fear it could affect their middle- and working-class members who have foregone wage increases in the past in order to receive high-end health care coverage as part of overall compensation packages during collective bargaining negotiations.

Filed under: Health care • Rahm Emanuel • State of the Union
soundoff (43 Responses)
  1. rachel

    What the heck is a cadillac healthcare plan? the ones congress has? or If I am fully covered is that a cadillac plan? This is ridiculous this is not the goldy locks and the three bears. If you have too much coverage you get taxed if you have no coverage you get tax...err penalized your coverage must be just right. Who is the government to decide what coverage is just right? I swear if my healthcare plan gets taxed or if my employer drops my healthcare if a public option goes through Barack will not get my vote that I sadly gave to him in the general and nobody who is up for reelection who supported this plan will get my vote. I can't afford to get taxed on my healthcare plan I gave up the raise I was due to stop layoffs and keep the healthcare plan I have.


    October 18, 2009 12:59 pm at 12:59 pm |
  2. Bill

    I don't see how this is any of the government's business. At all. Whatsoever. In any respect.

    October 18, 2009 01:10 pm at 1:10 pm |
  3. Razorback

    When McCain's campaign proposed taxing health insurance plans last year, all I saw on here was how Republicans were screwing the middle class by taxing their benefits. Now it's OK? And I have to get over it when my plan is taxed? Don't think so. I chose my profession partially because of the benefits which included a Cadillac health plan. Now the Cadillac plan is more like a Oldsmobile (better make that Buick since Oldsmobile was discontinued!) plan but with higher premiums and deductibles. It isn't given to me. I earned it as part of my compensation package. This will be another promise broken (remember "no new taxes on anybody making less than $250K?) and Democrats screwing the middle class. And no, I won't get over it-I and others in my situation will remember at election time!

    October 18, 2009 01:10 pm at 1:10 pm |
  4. Maria - Proud Democrat

    We need to hear a better definition of what a Cadillac plan is........as this TAX might impact a majority of Americans.

    We can barely afford to pay for our insurance the last thing we need is another TAX on top of that.

    October 18, 2009 01:14 pm at 1:14 pm |
  5. Debbie

    I don't think either side is right. Those with premium insurance should not be taxed because they have a better plan. And it will not help labor in public perception. What needs to happen is:
    1. No exclusion for the insurance industry on anti-trust.
    2. Exchanges, triggers, and/or public health should be available to keep the industry (doctors, insurance, hospitals) all in competition as part of the free market system.
    3. Corporations must be held as non-human entities and taxed their share closing all loopholes.
    4. Lobby loop holes must all be closed and a return to a balance of power to citizens and non-human corporations.

    October 18, 2009 01:54 pm at 1:54 pm |
  6. ObservantOne

    Why is everyone in such an uproar? We all know that Healthcare Reform would amount to increase taxes. With the majority of Americans out of work and/or working with reducted hours, how are they expected to pay for $900M healthcare bill, without taxing the remaining workers.

    Personally if the President, Congress and the Senate would have focused as hard on creating jobs as they have on healthcare, we wouldn't have this issue. Oh, well, I guess it's a matter of priority, 2010 and 2012 is just around the corner. Wake up Americans!!!

    October 18, 2009 01:58 pm at 1:58 pm |
  7. Burns NH

    Gee whiz,if you need and afford to pay for a better plan that suits your
    families needs,go for it. You should not be made to pay for those
    who don't have have those assets. We have a great country of very
    generous folks who have helped time and time again those that are
    less fortunate. This is not like Robin Hood stealing from the rich to
    feed yhe poor, iits more like," stealing period".

    October 18, 2009 02:19 pm at 2:19 pm |
  8. Reformed Republican

    Since I make $175K+ and I'm single I would be willing to pay a "luxury tax" on my premo health inusrance plan to help cover the costs of a strong public option. What's a few bucks here or there anyway – I really would not be sacrificing anything anyway.

    If not, them my really great health insurance plan will cost twice as much in 5 years and in fact will start getting to expensive for even me to afford.

    Here's a promise, not a threat – If congress can't pass health care insurance reform with a good public option then I'm gonna vote for someone who can.

    October 18, 2009 02:21 pm at 2:21 pm |
  9. mark

    why tax success? its not the fault of the wealthy that they paid attention in school, got into and performed well at good college and then went on to have good careers. i just have an absolute problem with the gvt penalizing me because i work hard and have to subsidize somebody that sits on their couch not doing anything.

    October 18, 2009 02:32 pm at 2:32 pm |
  10. Ron Ft. Myers

    Does this mean Obama and the other "enlightened' beings in Washington are prepared to pay taxes on their Cadillac plan that we taxpayers give them.

    I'd be happy to get in the same group plan they are in and I'd even be willing to PAY for myself. Why can't Obama make that happen? It would lower my cost approximately $600.00 per month if not more. Tha's a simple solution for many already paying for health insurance.

    October 18, 2009 02:33 pm at 2:33 pm |
  11. Bernie

    I thought the objective was to give us all 'adequate' health care.

    A tax will only hinder the process. Currently, we consumers have only the option of the reduction of benefits and higher co-payments that is associated with a lower-cost healthcare insurance plan.

    If taxation is the cure, then our Federal lawmakers should be paying the heaviest tax for their 'Cadillac' health care package and consequently be paying the government for their posts in Congress.

    Currently, many tests are repetitive or unnecessary due to incomplete medical history at the time of treatment. Many procedures are performed only to 'pad' the bill. The debate should focus on why there's so much waste in our health care system and on how to give both patients and their care givers a better comparative analysis of treatment methods so that the most effective, lowest cost treatment can be given. Information is key to both remedial approaches.

    Computerized information systems must be implemented.

    October 18, 2009 02:55 pm at 2:55 pm |
  12. kaleto

    Make no mistake, any "reform" coming from the democrats will cost hardworking Americans big time. Healthcare will only be free for illegals and those who don't work; the rest of us will foot the bill.

    And that bill is going to be HUGE. They're lying when they say it will be "deficit neutral". They assume they'll be able to save money by curtailing Medicare abuse (so why haven't they been doing this all along????), but any government-run plan will be ripe with fraud. They also aren't counting the costs incurred more than 10 years out. The TRUE cost over 10 years is estimated to be $2,000,000,000,000!!!

    That means every man, woman and child in the U.S. will be paying at least $667 every year for 10 years. How's THAT for a stimulus package!

    October 18, 2009 03:04 pm at 3:04 pm |
  13. Ed

    Democrats want a competing government healthcare plan, and at the same time want to tax that competition's higher plans? This would appear outright illegal and anti-competitive.

    October 18, 2009 03:10 pm at 3:10 pm |
  14. Rob

    I agree with an earlier poster that rolling back the Bush tax cuts could possibly bring in a ton of $$$ to help pay for this. Wealthy people were doing just fine during the Clinton years, so there should be no whining about it.

    I don't like the tax on "Cadillac" plans. I agree with the unions that such a tax would end up diluting everyone's benefits, especially for those who have given up wage increases.

    What I don't understand is why we feel like everything we do MUST be based on capitalism. I am fine with being a capitalist society when it comes to conducting business, but I think basic human rights and services need to be exempted from that. Health care, police, fire, etc. These things SHOULD be guaranteed to all legal citizens. Because otherwise what it says is that if you make more money you are more worthy of getting good health care than someone making minimum wage. In our country, someone working at Burger King is not as entitled to get cancer treatment as say a CEO of a Fortune 500 company. That is just wrong. Providing health care for all should transcend above big business and worrying about profits. People should not have to worry whether they will be forced to die because their insurance provider thinks they are too risky to cover. Makes me sick really.

    October 18, 2009 03:33 pm at 3:33 pm |
  15. Henry Miller, Libertarian, Cary, NC

    The philosophy of Democrats seems to be that, if you have money, they want it.

    October 18, 2009 03:56 pm at 3:56 pm |
  16. Albo58

    Does anyone seriously believe that Union members will have to pay a tax on thier health care under this administration and Congressional majority? Just like the auto bailouts, this administration doesn't do anything without Union approval. It's an absolute disgrace!

    October 18, 2009 03:59 pm at 3:59 pm |
  17. Preston kathy

    Kathy and preston i get a small pension from my union for working over 30 years my union took over fifty dollars extra from check every month so the union could pay there workers hdath care why do the workers always have to suffer im poor

    October 18, 2009 04:17 pm at 4:17 pm |
  18. DAVE

    due to the heavy bias that obama has for all unions I am pretty sure that when it comes down to it these unions will be given a pass on there cadillac plans..... obama has more payoffs to give them and pretty sure the bailouts of the car companies which was quite lucrative for the auto unions is not enough to pay for all there votes...... the sad thing is they are directly responsible for the collapse of GM and Chrysler

    October 18, 2009 04:49 pm at 4:49 pm |
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