Despite the political risks of tampering with employer coverage, policy experts and economists across the political spectrum argued that the tax would start to get at a fundamental reason behind high USA health-care costs.
Unions oppose a tax on health benefits because health insurance is one of the most important issues for their members, and union plans are generally a cut above what non-union employers offer.
"Today's House vote sent a clear message that taxes on our health care system are a bad idea - and that the case for keeping the medical device tax in place no longer holds water", said Scott Whitaker, president and CEO of AdvaMed.
The Congressional Budget Office estimates that repealing the tax will increase the US deficit by $193 billion between 2022 and 2029. The nonpartisan Kaiser Family Foundation expects that about 1 in 5 employers offering health insurance would have at least one insurance plan subject to the tax in 2022, and the share would grow quickly over time.
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. "Now, Senator McConnell must take a cue from the strong statement made today in the House and bring this bill up for a vote in the Senate". Every vote for this bill is a vote to protect the health care coverage of more than 181 million Americans.
The six "nay" votes came from Reps. (Such employer-financed plans were previously excluded from income and payroll taxes.) The tax would also generate revenue that the US government would then use to fund other ACA programs.
The insurance tax "increases premiums by tens of billions of dollars for employer-provided and individual market coverage, and increases costs for seniors with Medicare Advantage as well as state Medicaid programs", Eyles said. The portion of the law that was supposed to be financed through the Cadillac tax instead would be paid for through deficit spending, unless lawmakers propose a last-minute tax increase to offset the cost.
Trade association Advanced Medical Technology Association (AdvaMed) calls on Congress to repeal the medical device excise tax following the passage of the Cadillac tax repeal.. "We hope Congress will repeal the device tax without delay".
The Alliance to Fight the 40|Don't Tax My Health Care is a broad-based coalition comprised of businesses, patient advocates, employer organizations, unions, local governments, health care companies, consumer groups and other stakeholders that support employer-provided health coverage.
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. "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".