While guest-hosting Fox News' Glenn Beck, Andrew Napolitano claimed that under "the Senate version of the health care bill," "everyone who receives health care from their employer" would have to "pay an income tax on the value of that health care." In fact, the Senate bill would tax benefits provided by employers only above a certain level; the provision has been referred to as a tax on "Cadillac plans."
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Napolitano claims bill affects all health insurance benefits from employers
From the January 8 edition of Fox News' Glenn Beck:
NAPOLITANO: Nick Gillespie, before we go, what kind of political headaches will the president have if the Senate version of the health care bill passes and everyone who receives health care from their employer has to pay an income tax on the value of that health care?
GILLESPIE (Reason.com editor in chief): Yeah, this is going to be a huge problem. You know, hopefully, it'll sink this reform. But it will be a huge problem because it will be hitting middle-class people in a big way. It will completely rip the lid off the idea that there was not going to be a tax on the middle class coming from the Obama administration, which may, then, spark a revolt or a rebellion and an actual discussion. And maybe, just maybe, we can get a health care reform bill that actually would bring the market into health care, rather than just paying off insurance companies, drug companies, and political hacks.
Senate bill taxes benefits above $8,500 a year for individuals, $23,000 for families
Tax applies only to "high cost employer-sponsored health coverage." From the Patient Protection and Affordable Care Act, as passed by the Senate on December 24:
''SEC. 4980I. EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED HEALTH COVERAGE.
''(a) IMPOSITION OF TAX. -- If --
''(1) an employee is covered under any applicable employer-sponsored coverage of an employer at any time during a taxable period, and
''(2) there is any excess benefit with respect to the coverage,
there is hereby imposed a tax equal to 40 percent of the excess benefit.
"(b) Excess Benefit. -- For purposes of this section --
"(1) IN GENERAL. -- The term 'excess benefit' means, with respect to any applicable employer-sponsored coverage made available by an employer to an employee during any taxable period, the sum of the excess amounts determined under paragraph (2) for months during the taxable period.
''(C) APPLICABLE DOLLAR LIMIT. -- Except as provided in subparagraph (D) --
''(i) 2013. -- In the case of 2013, the dollar limit under this subparagraph is --
''(I) in the case of an employee with self-only coverage, $8,500, and
''(II) in the case of an employee with coverage other than self-only coverage, $23,000.
Obama has referred to the provision as a tax applying to "Cadillac plans"
In NPR interview, Obama said, "I'm on record as saying that taxing Cadillac plans ... that's actually a good idea." From a December 23 NPR.org article about Obama's interview with All Things Considered:
Obama told NPR that he supports a key provision in the Senate bill that would raise revenues to pay for the expansive plan by taxing insurers that provide so-called Cadillac plans, or high-end employer-paid insurance plans.
"I'm on record as saying that taxing Cadillac plans that don't make people healthier but just take more money out of their pockets because they are paying more for insurance than they need to do, that's actually a good idea," he says. "That helps to reduce the cost of health care over the long term."