Blumenthal, Murphy Join Bill to Strike Cadillac Health Tax While Demanding That Repeal Doesn't Increase the Deficit

(Washington, DC) – U.S. Senator Richard Blumenthal (D-Conn.), U.S. Senator Chris Murphy (D-Conn.), and 8 of their Senate colleagues introduced legislation today to improve the health law by repealing the so-called “Cadillac tax.” The bill also includes a “Sense of the Senate” clause demanding that any repeal be offset so it does not increase the federal deficit or negatively affect the health insurance coverage that 9.9 million Americans have received because of the health law. U.S. Sens. Chuck Schumer (D-NY), Sherrod Brown (D-OH), Patrick Leahy (D-VT), Mazie Hirono (D-HI), Jeanne Shaheen (D-NH), Michael Bennet (D-CO), Bernie Sanders (I-VT), and Bob Casey (D-PA) are cosponsors. 

“This measure eliminating the Cadillac tax ensures that workers in Connecticut and America are protected from paying more money for fewer health benefits, while preserving the integrity of the Affordable Care Act,” said Senator Blumenthal. “I have heard from many concerned Connecticut constituents – teachers, firefighters, police officers, and business groups – who risk facing financial uncertainty if this tax goes into effect. This legislation safeguards the bank accounts of hard working, middle-class Americans while preserving their access to affordable healthcare.”

“The Affordable Care Act has insured more than 17 million Americans, constrained costs and stopped insurance companies from discriminating against patients with preexisting conditions,” said Murphy. “The law is already a stunning success, and we can make it even better by eliminating a tax that would be particularly impactful in high-cost states like Connecticut."

The Affordable Care Act (ACA) imposes a 40 percent nondeductible excise tax on health plans with values exceeding $10,200 in coverage for singles and $27,500 for families. The provision is indexed to inflation and will rise automatically over time, potentially affecting all employer-sponsored plans over time.

The bill would strike the excise tax while demanding that repeal be fully offset so it does not increase the federal deficit. Over the next ten years, the excise tax is projected to raise $87 billion in revenue. The bill would demand that repeal is accompanied by a proposal to offset lost revenue to prevent an increase in the federal deficit and protect the integrity of the health law.

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