Release: Tax on Workers’ Health Insurance Plans a Bad Idea

Senator, Workers, and Labor Leaders Speak Out

WASHINGTON, December 10 – Sen. Bernie Sanders (I-Vt.) today called for the elimination of a provision in the Senate health reform bill which would tax some health insurance plans. 

“Imposing an excise tax on health insurance plans would be a disaster for millions of middle class Americans,” Sanders said.  “Some of my colleagues would have you believe that the tax in the Senate bill only falls on ‘Cadillac’ health care plans, but the truth is that the plans this bill will tax are more like Chevrolets.”

Sanders has introduced an amendment to strike this provision from the Senate-introduced Patient Protection and Affordable Care Act. 

“Imposing a tax on health benefits while working to ensure that all Americans have good health benefits isn’t just illogical, it’s bad policy,” added Sen. Sherrod Brown (D-Ohio), a co-sponsor of Sanders’ amendment.  “We want Americans to have dental coverage.  We want Americans to have vision coverage. We cannot then penalize Americans that already do.”  Sen. Al Franken (D-Minn.) has also co-sponsored the amendment.

The so-called “Cadillac” health insurance plans in fact can have premiums around $8,500 for an individual plan and $23,000 for a family plan.

According to Mercer, one of the largest employer consulting firms in the country, this tax would hit one in five health insurance plans by 2016.  The Communication Workers of America have estimated that this would cost families with a Federal Employee Health Benefits Blue Cross/Blue Shield standard plan with dental and vision benefits an average of $2,000 per year over the 10 year course of this bill, and individuals with the same plan can average $1,600 a year over the same period.  As health care costs continue to rise, the tax will hit more and more health care plans.  By 2019, it will burden one in three. 

Sanders continued, “The House bill includes a surtax on the wealthiest people in this country to pay for health care reform.  It would raise $460 billion over 10 years, with a surcharge on the top three tenths of 1 percent of taxpayers.  An overwhelming majority of Americans support it: according to a recent poll by USA Today, 59 percent support the House tax on the wealthy.” 

Sanders was joined at the Capitol Hill news conference by Congressman Joe Courtney (D-Ct.); Larry Cohen, president of the Communication Workers of America; Arlene Holt Baker, executive vice president of the AFL-CIO; Lily Eskelsen, vice president of the National Education Association; James Huber, a Baltimore steel mill health insurance counselor and member of USW Local 9477; Valerie Castle-Stanley, AT&T call center worker and CWA member from southwestern Virginia; and Gary Willett, a Giant Food warehouse worker and member of Teamster Local 730 in Washington, D.C.