A picture of Senator Martin Heinrich
Martin H.
Democrat NM

About Sen. Martin
  • Middle Class Health Benefits Tax Repeal Act

    by Senator Martin Heinrich

    Posted on 2015-12-09

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    HEINRICH. Mr. President, I start by thanking my colleague, Senator Heller of Nevada, for his partnership and his leadership in pushing this issue forward and doing so effectively. I think the amendment we saw last week speaks to just how bipartisan this has become and how important it is. These days, there truly aren't many things around this place where we get a 90-to-10 vote.

    This tax, which will go into effect in 2018, was meant to help pay for other parts of the Affordable Care Act by charging a 40-percent tax on the highest cost, employer-based health plans. It was supposed to target only overly generous health plans--the ``Cadillacs on the health care highways,'' so to speak. In practice, however, the tax has become more of a ``Ford Focus tax.'' It will impact middle-income families who, for reasons that are largely outside their control, have health plans that already or soon will reach their policy limits.

    The tax will force many employers to pay steep taxes on their employees' health plans and flexible spending accounts. It will possibly eliminate some employer-provided health care plans altogether.

    The Cadillac tax has already limited options for New Mexicans to curb costs and keep plans affordable. Let me give an example. I recently heard from Jamie Wagoner, the benefits and compensation manager for the city of Farmington, NM. Under her leadership, the city began implementing wellness programs to slow the increase in health [[Page S8536]] spending--exactly what we all wanted. Unfortunately, the city recently learned that its wellness programs would ultimately be factored in as a benefit subject to the Cadillac tax.

    It doesn't make sense that benefits designed to promote health and wellness, and ultimately drive down costs, actually end up triggering this new tax. This creates an inverted incentive for employers to avoid preventive benefits, such as wellness programs, that we all know are central to keeping our health care costs under control.

    There are better ways to pay for the good things in the Affordable Care Act. Doing away with this onerous tax on employees' health coverage before it goes into effect will protect important benefits for workers and ensure that businesses and families get a fair deal.

    I have always opposed this tax on the middle class, and I worked to strip it from the ACA when I was a freshman legislator in the House of Representatives. In New Mexico, small business owners, labor unions, counties, rural electric co-ops, municipalities--you name it--all oppose the tax. When was the last time we had a piece of legislation that united all of those constituencies? That is why Senator Heller and I introduced the Middle Class Health Benefits Tax Repeal Act of 2015 to fully repeal this tax. This bipartisan effort also has companion legislation in the House of Representatives--legislation that has 178 cosponsors from both sides of the aisle. There was a vote on an amendment that Senator Heller offered to include a full repeal of the Cadillac tax in the budget reconciliation bill, and the amendment was adopted 90 to 10, as my colleague pointed out.

    The landmark reforms in the ACA have given thousands of my constituents access to affordable, quality health care for the first time in their lives. But even the strongest supporters of this law know it is not perfect, and there are some parts of it that we absolutely need to fix. This is one of them.

    Republicans and Democrats need to put aside the partisan politics, put aside the grandstanding, and remember why Congress passed the ACA in the first place--to expand access to quality health care for all Americans. We need to work together to produce pragmatic policy that helps us achieve that goal.

    So I ask my colleague from Nevada specifically how this Cadillac tax, as it is called, would impact his residents and constituents in the State of Nevada.

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