Virginia Leaders on Both Sides of the Aisle Want to End the ACA's "Cadillac Tax"

Aug 7, 2019

Credit AP Photo / Andrew Harnik

Washington isn’t a place that’s known for bipartisan agreement on many things. But, Republicans and Democrats from Virginia are coming together in an effort to repeal a key part of the Affordable Care Act.

It’s called the Cadillac Tax, a key part of financing the Affordable Care Act signed into law by President Barack Obama back in 2010.

Sabrina Corlette at Georgetown University says it’s not called the Cadillac Tax because it taxed luxury automobiles. 

“The reason it’s called Cadillac is because the target is very generous employer-based insurance," Corlette explains. "And by generous what I mean is coverage that has a very broad choice of providers and very low deductibles or low cost-sharing for the employee.”

$30,000 for a family plan or $11,200 for an individual. Unions don’t like it, which explains some of the opposition on the left. And employers don’t like it, which makes it unpopular on the right.

But Frank Shafroth at George Mason University says repealing the tax would mean the federal deficit would increase $157 billion over the next decade.

“That has implications for school systems, cities and counties because property taxes will have to go up to accommodate the higher cost for mortgage interest and business investment,” Shafroth says.

This is an effort that doesn’t just have support from a few Republicans and Democrats in the Virginia delegation. The bill actually has six Virginia co-sponsors, four Democrats and three Republicans.

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.