Cadillac Tax Fallout

As health care negotiations continue among Democrats in the Congress and the White House, more liberal Democrats are venting their frustration about the President's change of heart on how to pay for health care reform.

The plan is a 40% excise tax on health care policies that cost more than $8,500 a year for individuals and $23,000 a year for families - the so-called "Cadillac" health plans.

The idea is hotly opposed by most labor unions, and they'll get to drive that point home today in a meeting with President Obama at the White House.

"The President will talk through with them what he believes can be gotten out of that provision," said White House Press Secretary Robert Gibbs.

Democrats in the House would rather have a surtax on the wealthy - that's what is in the House passed bill, raising money from individuals making over $500,000 a year, couples over $1 million a year in income.

As for the Cadillac tax, it would be paid by the insurance companies, but critics argue that those insurers will just pass the cost on to the consumer.

The idea is that the tax will help hold down costs by forcing companies to offer less expensive plans. Critics argue those policies will then have higher deductibles and thus might actually cost the consumer even more in out-of-pocket costs.

SOURCE: Jamie Dupree