A report released December 17 by the Communications Workers of America (CWA) argues that the 40 percent excise tax on "Cadillac" health insurance plans that the Senate Democrats' health reform bill (HR 3590) would impose on health insurers, would adversely affect middle class Americans. The CWA report says that, though the law applies to insurers, it would affect nearly 25 million households by 2019, costing those households an average of $7,500 more over seven years. The CWA report also estimates that, by 2019, the tax would affect 20 percent of middle class Americans earning between $50,000 and $75,000 annually.

From the report:

Health care legislation in the U.S. Senate would raise $149 billion over ten years by imposing a 40 percent excise tax above certain thresholds on insurance company health plans and self-insured plans offered by companies to their workers. This tax would have a dramatic effect on those plans forcing steep reductions in benefits, shifting of costs to workers and a significant increase in taxes on millions of middle‐class families.

Full report: Senate Health Plan Excise Tax Equals a Big Middle Class Tax Increase (PDF | 156.12 KB)

Communications Workers of America Research Department. (2009). Senate health plan excise tax equals a big middle class tax increase.