Health & Spirit

House passes repeal of Obamacare tax on high-cost plans

Mary Ellen McIntire, CQ-Roll Call on

Published in Health & Fitness

WASHINGTON -- The House passed, 419-6, legislation Wednesday to repeal the so-called Cadillac tax, pleasing health insurers, unions and a bipartisan coalition of lawmakers who have long pushed to scrap the levy.

The measure would permanently repeal the 40% excise tax on high-cost employer-provided health insurance, which was envisioned as a key way to pay for the 2010 health care law. The tax, which Congress twice delayed from taking effect, is set to go into effect in 2022.

Members of both parties said on the House floor before the vote that repealing the tax would help improve affordability, since employers have shifted to high-deductible health plans to avoid the levy.

"If we fail to repeal the Cadillac tax, we will leave working families with less health care coverage, higher out-of-pocket health care costs and little to no wage increases," said Ways and Means Committee Chairman Richard E. Neal of Massachusetts.

Republican Rep. Mike Kelly of Pennsylvania praised the move as a bipartisan way to preserve employer-sponsored health insurance.

The path in the Senate is less clear. The House passed legislation last year to repeal the health care law's 2.3% tax on medical devices, but the Senate did not take it up.

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Senate Finance Committee Chairman Charles E. Grassley said Tuesday he doesn't expect the Senate to act on it this year.

"You're talking about something coming up in 2021," the Iowa Republican said, adding that the Senate would instead focus on more pressing issues.

The tax never took effect under intense lobbying against it by employers and unions, but economists oppose its repeal, given that it is not offset and would cost about $197 billion over a decade, according to the Congressional Budget Office.

Steve Wojcik, vice president for public policy at the National Business Group on Health, said the repeal would remove uncertainty for employers planning future insurance coverage for their workers, a process that for large employers often spans two years.


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