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House votes overwhelmingly to repeal Obamacare "Cadillac" tax

Biden unveils $750B plan to expand Obamacare
Biden unveils $750 billion plan to expand Obamacare 02:12

The Democratic-led House of Representatives has overwhelmingly voted to repeal a tax on high-cost health insurance plans under Obamacare known as the "Cadillac tax." 

The 419-6 vote is a signal of bipartisan unity against a key provision of the Affordable Care Act. The 40% tax on high-cost plans is meant to help subsidize other plans under the Affordable Care Act, but it's become unpopular even among many Democrats. 

"We also continue on to delivers our promises to workers today will honor our promise to be to the hard working men and women of the labor of labor as we lift the Cadillac tax, protecting health benefits that workers have negotiated," House Speaker Nancy Pelosi said Thursday. 

Based on Congressional Budget Office estimates, repeal would add $193 billion to the federal deficit from 2022-2029, by removing projected revenues off the government's books. The nonpartisan Kaiser Family Foundation expects that about 1 in 5 employers offering health insurance would have at least one insurance plan subject to the tax in 2022, and the share would grow quickly over time. 

Before the passage of the ACA, employers used to benefit from offering the expensive plans because they were not taxed on employee health care benefits, while they are taxed on the salaries they pay their employees. Labor unions, in particular, disliked the tax because they're known for their generous health care benefits, and they have argued that the 40% tax would affect their members. 

The Trump administration has already been administratively dismantling key parts of Obamacare. The administration has stopped enforcement of the individual mandate, meaning people are no longer financially penalized for failing to have health insurance, even though that's technically still the law of the land. 

The president has pledged to introduce a new GOP health care plan, but that has yet to come to fruition.

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