Tom Price Health Plan

May 31^st 2015

A representative of congressman Tom Price claims in a letter to  the AJC that the cost of Tom Price's health care plan for so called Cadillac insurance is less than that proposed in the ACA. The writer states that Jay Bookman's expose of the Price tax in relation to Obama's ACA was like comparing apples and oranges. The  premise on which his claim is based is that the cost of the extra insurance in Prices's plan is paid from post tax earnings and would be less than the 40% tax imposed within the ACA. 

Most of the people receiving these Cadillac plans will be in the highest earnings bracket  and will be subject to the federal marginal tax rate of 39.6%. In addition, if they live in Georgia, they will also be paying a marginal tax rate of 6%. So in effect, in Price's plan, they will be paying 45.6% tax on their Cadillac Insurance costs above $20,000, whilst the ACA excise tax implemented in Obamacare will be 40% on Cadillac Insurance costs above $27,000. Hence the Obama plan will be less tax overall for the recipient of such a platinum insurance plan.