White House changes to ‘Cadillac’ tax lessen liberal resistance to reform bill

Rep. Chris Van Hollen (D-Md.) on Thursday said White House changes to the tax on high-end insurance plans included in the health reform bill have minimized Democratic opposition to the tax.

“I think the proposal that the White House put on the table resolved a lot of people's concerns,” he said.

President Barack Obama last month proposed raising the tax threshold on so-called “Cadillac” insurance plans from $8,500 to $10,200 for individuals and from $23,000 to $27,500 for families. The tax’s 2013 effective date was also postponed to 2018 and would apply to all plans, including those negotiated by unions.

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Before these changes were made, Democrats railed against the tax and several vowed to oppose the bill if it remained in the final package. The tax was the centerpiece revenue-raiser in the Senate-passed reform bill. House Democrats called on leaders to replace the levy with the tax surcharge included in their measure.

Instead of heeding their advice, the White House tweaked the Senate provision to make it more palatable to House members.

“That won’t be the reason to vote no, because they have raised the thresholds,” Rep. Bill Pascrell (D-N.J.) told The Hill.

Rep. Alcee Hastings (D-Fla.), who doesn’t like the tax, even admitted that White House changes have made the levy acceptable.

“It doesn’t affect me,” he told The Hill. “I don’t like the tax, but I’m going to vote for the bill … Something is better than nothing.”