Policy

House to vote on health care ‘Cadillac tax’ repeal

Surcharge on certain high-cost employer health plans was envisioned as a way to pay for Obamacare law

Rep. Joe Courtney, D-Conn., sponsored the repeal bill, which has been a priority for both the insurance industry and labor unions. (Bill Clark/CQ Roll Call file photo)

The House plans to vote Wednesday on legislation that would roll back the so-called “Cadillac tax” under the 2010 health care law known as Obamacare.

The 40 percent surcharge tax applies to certain high-cost employer health care plans (hence the “Cadillac tax” nickname). It isn’t set to take effect until 2022, and Congress has twice delayed its implementation.

The tax was envisioned as a way to help pay for the 2010 health care law. There’s bipartisan support in both the House and Senate for its repeal, which has been a top priority for the insurance industry and labor unions.

Still, the prospect of repeal, especially without offsets to pay for it, makes health economists shudder. The Congressional Budget Office projected in May that rolling back the excise tax would cost $193 billion between 2019 and 2029. Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities, wrote this week that the cost could reach $1 trillion in the 2030s.

The bill will be considered under suspension of the rules, an expedited procedure that limits debate and requires a two-thirds majority vote to pass. With 359 co-sponsors, the bill is expected to easily sail through the House.

Democratic Rep. Joe Courtney of Connecticut, the bill’s lead sponsor, asked in May that the measure be put on the House “consensus calendar,” which Speaker Nancy Pelosi agreed to when she sought the speakership last year. That creates a path to floor votes for bills with at least 290 co-sponsors.

If the House passes it this week, it’s not clear whether the Senate would take up the bill. The Senate never took up legislation to roll back another tax levied under the health care law, a 2.3 percent excise tax on medical devices, after the House passed it last year.

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