Axne Praises House Passage of Bipartisan Bill to Lower Health Care Costs

WASHINGTON – Today, U.S. Rep. Cindy Axne (IA-03), a member of the Affordable and Accessible Health Care Task Force, praised House passage of bipartisan legislation that would permanently repeal a provision within the Affordable Care Act that would raise premium prices on Iowa families. The Middle Class Health Benefits Tax Repeal Act of 2019 would permanently repeal the 40 percent excise tax on the most expensive employer-provided health insurance plans, known as the ‘Cadillac Tax.’ Although the ‘Cadillac Tax’ is levied on insurance companies, if enacted, it would raise premiums on middle class families.

“Without delaying this tax, hardworking Iowa families could see lower wages or higher health care costs,” said Rep. Axne. “Repealing this tax permanently will provide stability in the marketplace and ensure permanent relief for Iowa seniors and working families. I will continue to work with Democrats and Republicans in order to find bipartisan solutions to shore up the Affordable Care Act and lower the cost of premiums and copays that empty workers’ wallets.”

The Cadillac Tax:

The Middle Class Health Benefits Tax Repeal Act of 2019 would repeal the ACA mandated ‘Cadillac Tax,’ the 40 percent excise tax on the most expensive employer-provided health insurance plans. Employer-sponsored health benefits whose value exceeds $11,200 for single coverage and $30,150 for family coverage would be subject to the excise tax of 40 percent starting in 2022.

Although the tax is on insurance companies, the burden will be passed onto Iowa workers. Employers will likely increase workers out-of-pocket costs (higher deductibles, narrower networks and increased co-payments) or lower wages in order to cover the costs of higher premiums that insurance companies will charge to pay for the ‘Cadillac Tax.’