This archive report was first published on 18 July 2019.
On July 18, 2019, the House of Representatives voted to repeal the 40% excise tax on generous employer-sponsored health plans, a key provision of the Affordable Care Act (ACA).
The move was sparked by concerns from Democrats' key supporters that the tax would hurt middle-class workers. Representative Joe Courtney of Connecticut, the bill's sponsor, titled it the 'Middle Class Health Benefits Tax Repeal Act' and secured 367 co-sponsors, including 200 Democrats.
Even some liberal economists, backed by unions, are urging repeal. The Economic Policy Institute argued that health care costs are already decelerating, making the tax unnecessary to pay for the health law and slow down health cost increases.
According to Thea M. Lee, president of the institute, and economist Josh Bivens, 'the tax aims to reduce patients' utilization of health care. But the glaring problem of U.S. health costs is not excess utilization; instead, it is high and rising prices for health care.'
Repealing the tax would increase projected federal deficits by $197 billion through 2029, according to the nonpartisan Congressional Budget Office. However, many health economists still see the tax as an important way to contain rising health care costs.
