President Barack Obama's fiscal 2017 budget will include narrowing the application of the Cadillac tax on high-end health insurance plans.
The chairman and chief economist of the Council of Economic Advisers wrote in the New England Journal of Medicine last week that the budget would include a provision allowing any state with an average premium for the highest tier “gold” exchange plan that would exceed the tax's threshold to see that threshold reset to the average premium for those gold plans.
Paul Van de Water, a senior fellow at the left-leaning Center on Budget and Policy Priorities, said the plan deserves serious consideration.
The tax, which was delayed for two years as part of the budget deal last year, could unfairly penalize employers offering plans that are not particularly generous but are in high-cost locations, he wrote in a blog post Thursday.
The budget cost of the delay is about $20 billion over the next 10 years, according to the Joint Committee on Taxation and the Congressional Budget Office.
Economists have maintained that the tax discourages plans that drive up healthcare costs. “While some suggest repealing the tax, reforming it to preserve most of its revenues and its ability to slow healthcare cost growth makes far more sense,” Van de Water wrote.
Obama's budget request is also expected to include $755 million for a cancer research initiative being led by Vice President Joe Biden.
