February 07, 2020
A health care reform plan from the Bipartisan Policy Center would repeal the Affordable Care Act’s employer mandate penalty and create a new Cadillac tax on employer health benefits.
The new type of Cadillac tax would limit the income-tax exclusion for employer-provided health benefits at a dollar amount equivalent to the 80th percentile of single and family coverage premiums. The limitation would only be applied to the high-value plans selected by higher-income individuals.
The plan would also modernize Health Savings Accounts, codify the Health Reimbursement Account regulations, and create a national all-payer claims database to which employer plans would have to report.
To increase affordability in the individual market, the plan proposes creating a federally-funded and state-administered reinsurance program and expanding the ACA’s premium tax credits.
To reduce system-wide health care costs, the plan calls for reducing hospital reimbursement rates in non-competitive markets, ending surprise medical bills, and eliminating barriers to prescription drug competition.
No public option is in the plan. Although the first principle in the plan is “all individuals should have meaningful and affordable public or private health insurance,” it does not propose or even discuss a public option, which is a large part of the 2020 campaign debates.
Takeaway: Taken as a whole, the plan is intriguing despite the provision to reinstate a new type of Cadillac tax on employer plans. Although the plan has no chance of being enacted, it does provide a policy roadmap for future Congresses to consider.