The Cadillac Tax and Its Potential to Transform How Americans Purchase Health Care Services

This Article examines one of the most contentious provisions of the Affordable Care Act – namely, the 40% excise tax on high-value health insurance provided by employers. This levy, commonly denominated the “Cadillac” tax, is scheduled to take effect in 2020 but has already induced many employers to raise annual deductibles on the health insurance they provide to reduce the value of such insurance and thereby lower their exposure to this new tax. After analyzing the administrative guidance proposed since the Cadillac tax’s enactment, this Article considers how that tax’s effective encouragement of high-deductible health insurance plans has inadvertently made the Health Savings Accounts that President George W. Bush promoted 15 years earlier much more appealing.