Perino falsely suggested Cadillac tax “carve-out” only applied to union members

Written by Brooke Obie

Published

Dana Perino falsely suggested that health care reform allowed unions a “carve-out” so that their high-cost “Cadillac” healthcare plans would not be taxed, but those of “the rest of us” would be taxed. In fact, changes made to the Senate health care reform bill delays the application and increases the thresholds of an excise tax for all high-cost plans -- not just union plans -- until 2018.

From the April 9 edition of Fox News' Your World with Neil Cavuto:

ERIC BOLLING (guest host): Union today, political party tomorrow, the largest union forming a third party to take on Democrats in November elections. If you think Dems are bending over backwards for unions sweetheart deals now, think again, says former White House press secretary Dana Perino. Dana, what's giving here? SEIU wants to now become a third political party?

PERINO: Well, sometimes when you have on the fringes on either party, you'll never do enough for them. So, like, Republicans sometimes will never do enough to satisfy the right, and certainly the Democrats are never going to be able to do enough to satisfy the left. And so you see anxieties and frustrations bubbling over, and this attempt in North Carolina to create a third party to pressure Democrats. Now, I don't know how serious the effort is. They say they've got 100 people gathering 85,000 signatures. We'll see if it comes through. but I do think it will put some pressure on some Democrats, but certainly not all of them.

BOLLING: Pressure to what, Dana? I'm trying to figure this out. Pressure to become more liberal, to skew further left?

PERINO: Well, sure. Promises -- for example, a lot of the unions might have wanted a public option when it came to health care, although they wanted their carve-out so that their Cadillac plans weren't going to be taxed. They ultimately got that, and the rest of us are going to have to pay for it.

But health care reform offers no special treatment for application of excise tax to union plans

Health care reform reconciliation bill delays the application of the excise tax on all high-cost plans until 2018. The health care reconciliation bill amended the excise tax provision of the Senate health care reform bill, delaying its implementation and increasing its thresholds for all high-cost plans until 2018, “to provide additional transition time for high-cost plans to become more efficient."

From the House Rules Committee's summary of the health care reconciliation bill:

High-cost plan excise tax. Reduces the revenue collected by the tax by 80 percent. This is achieved by: delaying the application of the tax until 2018, which gives the plans time to implement and realize the cost savings of reform; increasing the dollar thresholds to $10,200 for single coverage and $27,500 for family coverage ($11,850 and $30,950 for retirees and employees in high risk professions); excluding stand-alone dental and vision plans from the tax; and permitting an employer to reduce the cost of the coverage when applying the tax if the employer's age and gender demographics are not representative of the age and gender demographics of a national risk pool. Under the modified provision, the dollar thresholds are indexed to inflation and the dollar thresholds are automatically increased in 2018 if CBO is wrong in its forecast of the premium inflation rate between now and 2018.

A proposed compromise between the House and Senate bills would have exempted high-cost union health care plans from the excise tax until 2018, reportedly to give union members more time to renegotiate their contracts, while non-union high-cost health care plans would have been subject to the excise tax starting in 2013. That proposed compromise was never implemented.