Jul 18, 2019 - Health

The "Cadillac tax" looks like it's about to die

There may only be one source of bipartisan agreement when it comes to the Affordable Care Act — opposition to its revenues and cost-control measures. Nothing checks both of those boxes quite as effectively as the law's "Cadillac tax" — which is now on its way out.

Driving the news: In an overwhelming 419-6 vote, the House signed off yesterday on repealing the tax on high-value health plans. Repealing the tax will cost the federal government almost $200 billion over the next decade, according to the Congressional Budget Office.

Real talk: This tax is one of those policies that economists absolutely love, and people who have to stand for election absolutely hate. And in those situations, politics usually wins.

  • Employers and unions — one big constituency for each party — both loathe the tax, which was designed to pressure them to make their health plans less generous or to find other ways to bring down their plans' costs.

What they're saying: "Unfortunately a lot of what Congress has been doing in recent years seems to be ignoring the budgetary consequences," Paul Van de Water, of the liberal Center on Budget and Policy Priorities, told The New York Times.

  • Congress has also delayed, frozen or repealed other revenue-raisers from the ACA, including taxes on medical devices and health insurance plans.
  • The controversial Independent Payment Advisory Board, or IPAB, has never actually been formed, but has engendered plenty of bipartisan opposition even theoretically.
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