Obamacare’s Cadillac Tax Hits the College Campus

Higher education and its comfortable inhabitants on campus have long been hotbeds of support for Obama and Obamacare. Now, along with business and labor, i.e., the other inhabitants of what passes for the real world, they are about to become victims of one of its high “Cadillac” tax on generous health plans.

In 2009 President Obama gave assurances that he did not want any tax on health insurance plans he considered wasteful or too generous to affect average Americans. In one of his now famous talks broadcast on CNN, MIT economist Jonathan Gruber, “one of the men who helped draft the legislation, [explains] that is not only precisely what will happen – but that was the intention of the tax.”

Politico notes that “a mix of business groups and labor unions” are arm in arm — and up in arms — fighting to kill this tax. Unnoted in the article is that higher education also will be hit especially hard. The dramatic impact of the “Cadillac” tax on higher education has been noticed before, such as on this site (“Obamacare Hits Adjuncts Hard”) and Megan McArdle’s delicious putdown, “Whining Harvard Professors Discover Obamacare.”

Now, as the scheduled 2018 implementation of the tax gets closer and more and more colleges begin to adjust their health plans to deal with it, awareness of the impending pain is beginning to spread. In New Jersey, four of the state’s 11 public colleges and universities have dropped student health insurance, and three of Washington State’s 6 public institutions have done so as well. Here are a few more tax induced changes:

• George Washington University: “It no longer offers its most generous plan as to avoid paying the tax.”