‘Cadillac Tax’ Slammed in New Health Care Ad

ABC News’ Teddy Davis Reports: A proposed tax on high-cost health insurance plans, the so-called “Cadillac tax,” is blasted in a new television ad by a union-funded group called Health Care for America Now (HCAN). “We all know that America needs health-care reform,” says the ad’s narrator. “But there is a right way, and a wrong way, to pay for it.” “Some senators say they want to tax so-called ‘Cadillac health-care plans,” the narrator continues. “But those proposals will also tax the benefits of millions of middle-class workers.” Watch it HERE. HCAN’s ad, which is dubbed “Right Way,” urges Congress to limit new taxes to individuals who make more than $250,000 per year. Under the Finance Committee bill which was approved earlier this week, a 40 percent tax would be imposed beginning in 2013 on the portion of employer-sponsored health plans exceeding $8,000 for individuals and $21,000 for families. Citing a preliminary analysis by the nonpartisan Joint Committee on Taxation, HCAN warns that the tax is projected to affect up to 40% of health plans by 2019. The tax would be levied on insurers — rather than individuals — but economists expect insurance companies to pass the cost of the new tax to consumers in the form of higher prices.  Supporters of the “Cadillac tax” see it not only as a revenue raiser but also as a way to restrain health spending. The idea is that individuals and businesses would be incentivized to look for cheaper health plans if expensive ones were taxed. Critics of the “Cadillac tax” worry, however, that it would hit middle-income union members who have foregone wage increases for generous health care benefits. Critics also worry that the tax would have an inequitable impact, falling harder on employers with older workforces or that happen to be located in high-cost regions of the country.  HCAN’s new ad will air for one week on national CNN and MSNBC, broadcast and cable in DC, and during Sunday political programs in select states.