Last fall Duke University research scholar Chris Conover wrote a powerful piece titled “Obamacare’s Three-Legged Stool of Deception,” in which he explained the covert way Obamacare crafters aimed to eliminate job-based health insurance through the Cadillac Tax.
- The first leg is that the Cadillac tax is paid by insurance companies, when in reality it is paid by employees.
- The second leg is that the Cadillac tax is aimed at “lavish” high cost plans, when in reality it is designed to eventually hit virtually every employer health plan (even those with lower-than-average costs).
- The third leg is that the Cadillac tax is functionally equivalent to a reform long championed by conservatives: a cap on the tax exclusion for employer-sponsored health insurance.
Dr. Conover hit a home run in detailing the duplicitousness of the law’s architects, and his piece is probably the best exposé of the Cadillac Tax you’ll find.
But who designed the Cadillac Tax, and how did Obama come to love it?
In his first presidential campaign, Obama repeatedly maintained that he was dead-set against taxation of health insurance benefits. He even chastened his opponent, Senator McCain, for proposing that Americans receive tax credits instead of tax-free insurance benefits.
“This is your plan, John: for the first time in history,
you will be taxing people’s health care benefits.”
Ezekiel Emanuel, special advisor for health policy during the law’s creation, gives us important insights into how, in the summer of 2009, Obama decided campaign promises weren’t as important as was more money in the federal coffers.
Zeke describes a “hot Friday July afternoon” in the White House when he says the “core health team” was working on Obamacare. After about an hour, he recalls, the president walked in, “in his shirt sleeves with his cuffs rolled up. He was there to give us a sort of uplift.” After pleasantries were exchanged,
“I raised with the President one of the issues that had been burning up the staff — the issue of something called the Tax Exclusion.”
In both videos linked above, Zeke describes the issues he and others had with tax-free employee benefits:
“The big argument we were having was, people on what was called the economic part of the health team…we wanted to do something about the tax exclusion because it’s inflationary, it’s regressive, it’s a lot of money.”
One obstacle? Obama wasn’t clear on his stance:
“We got into some weeds, and he would say, ‘What did we say about that? What was my position on that? ‘Cos the people should know I stand by my position.’”
And since David Axelrod, his senior advisor, pointed out that he’d spent $100 million running ads against McCain’s position, the Campaigner-in-Chief stalled, worried that he’d be contradicting his promises.
“David Axelrod, as part of this debate internally, created a montage of all the ads that President Obama had run against John McCain attacking McCain’s proposal — which was basically to get rid of the tax exclusion and give people a tax credit instead to buy health insurance.”
Eventually the economic team won Obama’s heart by showing him how much power and money ($250 billion per year) the Cadillac Tax would grant him.
“I said, you know, Mr. President, as President, you can control a lot related to the public provision of health care insurance — Medicare, Medicaid, CHIP, veterans health benefits — but you don’t have a lot of power over the private side. And that, after all, is the bigger side. It’s most of the money, covers half the American population.”
That “hot Friday” was July 17, 2009, when the Washington, D.C., temperature soared to 90.9º.
“(O)ver the course of the next few days, this was Friday, then Monday and Tuesday we had meetings around this, the idea began to hold that we should do something about it, we shouldn’t roll it back, but we should modify it.”
The following Monday and Tuesday were July 20 and July 21, 2009. White House visitor logs show an “Economics Team” indeed met the morning of the 20th. (White House visitor logs also indicate that the beloved Jonathan Gruber was in attendance!)
So why did THIS happen, on Thursday, July 23, 2009, in Shaker Heights, Ohio?
“First of all, in terms of taxing benefits, I said I oppose the taxing of health care benefits that people are already receiving, so that’s not a proposal that I’m supportive of…But what I said and I’ve taken off the table would be the idea that you just described, which would be that you would actually provide — you would eliminate the tax deduction that employers get for providing you with health insurance, because, frankly, a lot of employers then would stop providing health care, and we’d probably see more people lose their health insurance than currently have it.”
Dear President Obama, wasn’t that exactly the goal? That we lose our plans and have to join your lousy exchanges?
It’s very odd that Obama repeatedly characterizes his views using terms like “what I’ve said is,” rather than “what I believe is.”
But it’s more than disappointing to learn that Obama lied to his Shaker Heights audience — and America — mere days after he fell in love with the bomb that will blow up job-based insurance.
H/T Citizen researcher Kathy in Alabama