Essentials of Health Policy and Law 2nd Edition by Joel Teitelbaum,Sara Wilensky

Exercise 4

The ACA includes a tax on insurers for more generous health plans. Because it is likely insurers will pass on the cost of the tax to consumers, the idea behind the tax is to provide incentives for people to choose lower-cost plans. In theory, the less money employers spend on health care costs (and other fringe benefits), the more they will spend on wages. The income tax paid for by workers on their higher wages will provide revenue that can be used to pay for health reform. In addition, people may be less likely to obtain unnecessary care if fewer services are covered by their plan or if cost sharing is higher.
Is it likely that employers will trade lower benefits for higher wages? Are there times or industries where this trade-off is more or less likely to occur?
In 2010, the average cost of an employer plan was $5,079 for single coverage and $13,770 for family coverage. Beginning in 2018, plans that exceed $10,200 for individual coverage and $27,500 for family coverage are taxed. Congress rejected lower thresholds for the tax ($8,500/$23,000) that would have raised an estimated $149 billion. Did Congress pick the right thresholds for the tax? Should they be higher or lower?
Why did Congress delay implementation of the tax until 2018? What are the pros and cons to having the tax start well after the main provisions of health reform are in place?