The debate over the 'Cadillac tax' is on again, and Washington's think tank world is vying against insurers, employer groups and unions to fend off a proposed repeal.
On Monday, nearly 100 economists and policy wonks from right-leaning, left-leaning and nonpartisan think tanks banded together on a letter to the Senate leaders, urging them not to follow the House example on repealing Obamacare's 40% tax on expensive health plans.
"We, the undersigned health economists and policy analysts, hold widely varying views on other provisions of the Affordable Care Act, and we recognize that measures other than the Cadillac tax could have been used to restrict the open-ended health insurance tax break," the letter said. "But we unite in urging Congress to take no action to weaken, delay or reduce the Cadillac tax until and unless it enacts an alternative tax change that would more effectively curtail cost growth."
Groups represented on the letter include the Brookings Institution, the American Enterprise Institute, the Center on Budget and Policy Priorities, Harvard University, George Mason University and the Committee for a Responsible Federal Budget.
Momentum is against them. The House effort passed by an overwhelming support, 419-6, and was backed by powerful unions, employer groups and insurance companies. House Speaker Nancy Pelosi (D-Calif.) framed the vote as "protecting health benefits that workers have negotiated."
Last week, Senate Majority Whip John Thune (R-S.D.) referenced the unpopularity of the tax as he posited the repeal could ride along with a package of tax extenders before the end of the year. The Senate's repeal proposal from Sen. Mike Rounds (R-S.D.) has more than 40 cosponsors.
So far opponents of the tax have managed to get it delayed year to year. A full repeal is expensive — about $200 billion over a decade.
