In a 2009 column, Professor Jonathan Gruber, the Affordable Care Act’s architect, defended the notion of a “Cadillac tax” on more generous health plans, even asserting that “[t]he Senate assessment on high-cost insurance plans doesn't walk like a tax or talk like a tax -- because it is not a tax.  It is an innovative way of financing the health reform we so desperately need.”

Six years later the consensus is that it is a tax, and a potentially ruinous one at that.  Gruber, alongside other ivory tower experts, had argued the tax “would reduce the incentives for employers to provide excessively generous insurance, leading to more cost-conscious use of health care and, ultimately, lower spending.”  He failed to realize that what might seem to him to be “excessively generous” has often been arduously bargained for by workers, often in lieu of salary increases – as salary is taxed while employer-paid premiums are not.

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A grocery worker, for example, may have a relatively-low salary, but the tradeoff might be generous health care through a Taft-Hartley Trust.  Gruber has decried the health care “tax subsidy” that drives such an approach, writing in 2013 that it “leads to too much health care.”  Our grocery worker might disagree that she has access “to too much health care” – particularly if she has, say, a child with a chronic illness.
Now, with the tax looming in 2018, and already long-affecting collective bargaining for multi-year contracts, both leading Democratic presidential candidates, Sen. Bernie SandersBernard (Bernie) SandersChris Murphy’s profile rises with gun tragedies Clip shows Larry David and Bernie Sanders reacting after discovering they're related For now, Trump dossier creates more questions than answers MORE (I-Vt.) and Hillary ClintonHillary Diane Rodham ClintonChris Murphy’s profile rises with gun tragedies DNC, RNC step up cyber protections Gun proposal picks up GOP support MORE, have joined labor unions and the business community in calling for its repeal.

Repeal, however, would further undermine two assumptions integral to the ACA.

First, and most tangibly, a Cadillac tax repeal would cost $91 billion in assumed revenue over a 10-year period.  Remember how the ACA was supposed to pay for itself?  There is also bipartisan support for repealing a medical device tax, which would be another $24 billion hit to government coffers, and Clinton has expressed openness to that repeal, too – most warmly in an October 2014 speech paid for by the medical device lobby.

Given that Democrats have already joined Republicans in running away from Medicare Advantage savings assumed in the ACA it’s becoming more obvious that the ACA drives federal budget cost, not savings.  Those costs include over a quarter-trillion dollars in overhead over a decade’s time, or roughly 22.5 percent of ACA expenditures, due to the gross inefficiency of having government contract with private insurers, creating new bureaucratic structures, for the provision of a public benefit.

The second ACA assumption that would be abandoned by a Cadillac tax repeal is any remaining pretense that the ACA actually controls health care costs.  The Cadillac tax may be a draconian social science experiment, but it would almost certainly succeed in Gruber’s aims of reducing health care costs by those afraid of triggering it.

The remaining ACA “cost controls” – such as a medical-loss ratio for insurers – have been no impediment to unprecedented health insurer prosperity in this new era of high deductibles, narrow networks, and now, in many places, skyrocketing premiums.  Even Clinton’s campaign website acknowledges “American families are being squeezed by rising out-of-pocket health care costs.”

Another ACA cost-saving brainstorm, “Accountable Care Organizations,” were supposed to, as Gruber represented in 2013, “coordinate care across providers and lower costs as a result.”  Instead hospitals have been incentivized to merge with one another and snatch up independent physician practices, leaving a much less competitive, and more costly, health care landscape.

The real world, it turns out, is a bit more complicated than a Massachusetts Institute of Technology economics classroom.

Williams is an Olympia, Washington attorney and frequent health care writer.