House votes to repeal key ‘Obamacare’ tax

WASHINGTON — In the heat of the legislative fight over the Affordable Care Act, Obama administration officials argued that including a steep tax on high-cost health insurance plans would hold down soaring costs by prompting employers to rein in such plans and force employees to spend more of their own money on their care.

On Wednesday, that feature, once considered central to “Obamacare,” was dealt a blow by an unlikely foe: Democrats.

The House voted almost unanimously to repeal the tax, not only a key cost-containment provision in former President Barack Obama’s signature health law but also one of the main ways it was supposed to pay for itself. Still, unions never liked it, nor did business groups or Republicans.

So with neither party showing much concern for the government’s rising tide of red ink, the House moved to permanently block the tax from taking effect — and balloon deficits by nearly $200 billion over the next decade, according to the nonpartisan Congressional Budget Office. Sen. Charles Grassley, R-Iowa, chairman of the Senate Finance Committee, has suggested that the Senate could follow suit.

The tax is supposed to take effect in 2022. But the overwhelming vote in the House — 419-6, with only three Democrats opposed — would increase the likelihood that it never does.

Indeed, the debate on the House floor was striking, with one Democrat after another denouncing the provision.

For Democrats, a key constituency is demanding repeal — organized labor. For decades, unions found it easier to bargain for richer benefits than higher wages, producing labor-sponsored health plans that could have faced the tax.