House Democrats, Republicans unite to repeal ObamaCare 'Cadillac Tax'

Here’s How Eager the House Was to Kill Obamacare’s ‘Cadillac Tax’                 

     

     Mike Blake

The provision was set to impose a 40% excise tax on the cost of employer-based health insurance exceeding certain amounts - generally $10,200 for individual coverage and $27,500 for family coverage - starting in 2022. McConnell has been reluctant to take up any health care legislation, Senate aides said, because Democrats are likely to use the opportunity to criticize Republicans' and the administration's efforts to dismantle the Affordable Care Act.

Originally scheduled to take effect a year ago, the controversial tax provision was delayed twice by legislation and, with passage of H.R. 748, the "Middle Class Health Benefits Tax Repeal Act of 2019", appears even less likely to move forward.

In a reversal of the usual partisan roles, Democrats rather than Republicans led the charge to kill a key part of Obamacare. If the Senate passes the measure and the president signs it into law, the threat employers have faced from the tax would disappear.

"The full repeal of the "Cadillac tax" would eliminate one of the most consequential policy levers to actually lower health care costs, " said Benedic Ippolito, a health economist at the American Enterprise Institute.

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. More than just health plan premiums are counted when determining the "cost" of the plan.

Repeal of the Cadillac tax is estimated to cost $200 billion from 2022 to 2029 and another $1 trillion in the decade after that, according to the Committee for a Responsible Federal Budget, a watchdog group. "Too many families are already suffering under Obamacare, and unless we repeal the Cadillac Tax, thousands of South Dakotans who get their health care from work are in jeopardy of losing the plans they now enjoy".

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The Cadillac Tax was included in the ACA (Obamacare) as a means to slow overall health spending by discouraging employees from selecting expensive insurance plans with lavish health benefits that could result in overuse of medical services, CNBC News reports. The analysis also found that the tax would affect more employers over time - up to 37 percent of employers by 2030.

However, lawmakers in both parties, along with labor unions, expressed concern the tax "would cause employers to reduce health benefits or burden workers with an increase in cost-sharing".

The Senate has a similar bill with bipartisan support, but Senate majority leader Mitch McConnell, Kentucky Republican, has not yet said whether he will bring it for a vote.

While the tax was in effect, the US medtech industry lost approximately 29,000 jobs, and research shows that an additional 25,000 jobs could be lost by 2021 if the tax is not permanently repealed.

"We've kicked the can down the road for so long on this one that the assumption is that it's never going to go into effect", said Representative Dan Kildee, a Michigan Democrat.

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