By Mathew Keller, RN JD
Regulatory and Policy Nursing Specialist
Regulatory and Policy Nursing Specialist
In its latest ploy, Allina Health has turned to the argument that the health insurance plan MNA nurses currently have would be subject to the excise tax in the Affordable Care Act, also known as the “Cadillac” tax in four years. MNA negotiators did not hear this argument at the bargaining table for one very good reason — the tax has absolutely nothing to do with this round of negotiations.
The “Cadillac” tax – which is really an excise tax – was enacted as part of the Affordable Care Act as a way to encourage increased cost-sharing in health insurance plans. It was also a negotiating piece for Congress as supporters sought support and passage of the law — increased cost-sharing, after all, limits costs for employers, an important piece of the lobbying puzzle. The “Cadillac” tax imposes a 40 percent excise tax on healthcare plans that are deemed too generous.
Allina’s argument that the “Cadillac” tax is a reason to limit nurses’ health insurance fails to pass muster, however, because the “Cadillac” tax does not take effect until at least 2020. The insurance plan that would be protected as a result of these negotiations, meanwhile, would end in 2019. Thus, the “Cadillac” tax could never conceivably apply to the insurance plans being negotiated.
There are several other flaws in Allina’s argument as well. First, it’s never actually provided any evidence that the plans would, in fact, be subject to the tax. Allina also fails to acknowledge that increasing cost-sharing in healthcare plans is controversial and may result in the ultimate repeal of the tax in the end — increased cost sharing results in heavily reduced care while sick, consumption of less-effective healthcare, disproportionately affects the working class, and may not actually slow down the runaway train of healthcare cost increases across the nation.
In fact, Allina’s attempts to shift nurses to higher cost-sharing is surprisingly likely to be an act against its own financial interests as well — increased cost-sharing leads to higher rates of bad debt as healthcare consumers (with insurance) struggle to pay their bills. Thus, it’s no surprise that Minnesota hospitals are seeing their rates of “bad debt” (unpaid bills that hospitals write off) increase, to the tune of a $15 million dollar increase between 2013 and 2014.
You don’t need to take my word for it, though. Just ask Allina Health CEO Penny Wheeler about the impact of increased cost-sharing. As she put it, “high deductible plans don’t improve healthcare.”