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Health Policy Experts Issue Statement Supporting Excise Tax on High-Cost Plans

October 1, 2015 at 10:45 AM

A group of 101 prominent health economists and policy analysts — including two Nobel prize winners, four current or past presidents of the American Economic Association, and former officials in both Democratic and Republican administrations — have sent Congress a letter about health reform’s excise tax on high-cost health plans (the so-called “Cadillac tax”).

The letter was spearheaded by a bipartisan group of health care experts — Henry Aaron, Joseph Antos, David Cutler, Peter Diamond, Robert Reischauer, Alice Rivlin, and Gail Wilensky.

“Health policy experts of all political persuasions” agree, the letter says, “that the unlimited exclusion of employer-financed health insurance from income and payroll taxes is economically inefficient and regressive.”  The excise tax, the letter continues, “will help curtail the growth of private health insurance premiums by encouraging employers to limit the costs of plans to the tax-free amount.”

The letter concludes:

We, the undersigned health economists and policy analysts, hold widely varying views on other provisions of the Affordable Care Act, and we recognize that measures other than the Cadillac tax could have been used to restrict the open-ended health insurance tax break.  But, we unite in urging Congress to take no action to weaken, delay, or reduce the Cadillac tax until and unless it enacts an alternative tax change that would more effectively curtail cost growth.

You may read the entire letter and the list of signatories here.