Congress announced a budget agreement late Tuesday that includes delaying the Affordable Care Act tax on high-end insurance plans and makes changes to two other taxes under the law.
The $1.1 billion omnibus budget deal that funds the government through October and a bill that includes about $750 million in tax breaks are expected to be voted on Thursday.
Lawmakers worked through last weekend to try to come to an agreement before Friday, when Congress adjourns for the year.
Paul Van de Water, a senior fellow at the left-leaning Center on Budget and Policy Priorities, said one of the main questions now is whether pushing back the Cadillac tax on high-end insurance plans will lead to it never actually getting implemented.
“One would have to admit that a two-year delay isn't a positive sign for those of us who are supporters of the tax,” he said.
The 10-year cost of repealing the Cadillac tax is more than $91 billion, according to the Joint Committee of Taxation. The tax is also designed to slow the growth of healthcare costs past the decade mark, Van de Water said.
“It's a lot of money, and in particular it's much more significant in the longer term than in the near term,” he said.
The Cadillac tax has never been universally accepted, even by those who have championed the ACA. Labor unions have rallied against it for fear workers could lose relatively generous benefits. That has prompted calls for repeal from all three major Democratic presidential candidates.
Meanwhile, President Barack Obama has stood behind the tax. Still, aides indicated that delaying its implementation would not be a deal-breaker for the omnibus budget deal.
The medical-device tax has already been in place, but under the deal will be frozen for two years.
Van de Water said that pause will have a much smaller effect than changes to the Cadillac tax, as will a delay of the annual tax on insurance providers also in the agreement.
Douglas Holtz-Eakin, president of the conservative American Action Forum, said in a post on the organization's website Tuesday that Republicans should repeal the ACA taxes because they are "bad tax policy."
"It harms Americans and hinders overall economic growth," he said. "Conservatives should fight against bad policy to the extent politically feasible at every given opportunity."
