Contrary to widespread belief, conservatives should support Cadillac Tax repeal

The House of Representatives this week will vote on H.R. 748, the Middle Class Health Benefits Tax Repeal Act of 2019. It is expected to pass the House by a wide, bipartisan margin.

H.R. 748 repeals the so-called “Cadillac Plan tax,” one of the big tax hikes that paid for Obamacare. The Cadillac Plan tax imposes a 40% excise tax on very expensive health insurance policies. The tax was meant to be a sort of proxy for limiting the tax benefit for employer-provided health insurance (for example, labor union plans and those in high-regulation states), to the extent the coverage is on the outer margins of cost. The tax has never gone into effect, and is currently delayed until 2022.

Some conservatives have said this de facto cap on employer-provided health insurance is worth preserving — a rare area of overlap between liberal and conservative health policy experts.