Dems Aim to Punt Vote on ObamaCare Taxes

Health-care companies are making a last-minute push to delay ObamaCare taxes as part of a year-end government funding deal, but they face resistance from Democrats who want to punt the issue until next year when they control the House.

Powerful health-care lobbies are pushing lawmakers to delay the implementation of the taxes, worried about taking a financial hit. Lawmakers have voted to push off the health law’s medical device tax, health insurance tax, and tax on high-cost “Cadillac” health plans in the past with bipartisan support.

But this year, Democrats who are poised to take control of the House in January are resisting the push from industry and Republicans, sources say, hoping to deal with the issue when they have more leverage.

“We’re hopeful and we’re pushing on the hill,” said Scott Whitaker, CEO of AdvaMed, a lobbying group for medical device companies.

The worry for medical device makers is that if delaying the taxes slips until next year, House Democrats might not make the device tax as high of a priority.

“You always want to take advantage of the moment, and I think we’re in the moment,” Whitaker said, adding that there is support among Democrats as well as Republicans for delaying the tax.

But dealing with the three ObamaCare taxes this year faces a steep climb.

“The sense that I get is that the Democrats would prefer to deal with the ACA [Affordable Care Act] taxes under Speaker [Nancy] Pelosi,” said James Gelfand, senior vice president for health policy at the ERISA Industry Committee, which represents large employers and is pushing to delay the Cadillac tax.

A House Democratic aide struck a similar note. “I don’t see an incentive for Democrats to work on these issues in the limited time we have left this year,” the aide said.

House Ways and Means Committee Chairman Kevin Brady (R-Texas) gave industry groups a boost this week when he proposed delaying all three Obama-Care taxes as part of a broader tax bill.

But he acknowledged that Democratic objections could get in the way of dealing with the health-care taxes.

“I can’t predict right now if they’re going to work together to govern in the remaining days of the session or they’re going to obstruct and delay these into the next year,” Brady said. “In the past, these delays in the ACA taxes have been bipartisan and have usually been extended in end of the year discussions.”

Democrats pushed back both on Brady’s larger tax bill and on dealing with the health-care taxes in particular. The larger bill would include fixes to the 2017 Republican tax law, which was almost uniformly opposed by Democrats.

“The only movement there’s been on these taxes is their inclusion in Chairman Brady’s dead-end tax bill — that’s not a horse I’d hitch my wagon to,” a Senate Democratic aide said of the health taxes.

Any discussion of including tax delays in the year-end government funding bill also depends on how the showdown over funding for the border wall plays out. All discussions around the funding bill are currently caught up in the fight over paying for President Trump’s wall on the southern border with Mexico.

Gelfand said his hope was that if work on the Cadillac tax slips into next year, House Democrats could move to fully repeal it, not just delay it.

Unions, major Democratic allies, have long been fierce opponents of the Cadillac tax, making the issue more of a priority for many Democrats than delaying the other two ObamaCare taxes.

Still, 57 Democrats joined Republicans to vote to repeal the medical device tax in July, a sizable number that illustrates the broad support.

The prospect that the action will need to wait until next year has sparked frustration even from some Democrats.

Democratic Sens. Doug Jones (Ala.) and Jeanne Shaheen (N.H.) joined a bipartisan letter last month calling for delaying the health insurance tax, which they said would drive up premiums.

The health insurance tax and medical device tax will go into effect in 2020 unless Congress acts. The Cadillac tax will take effect in 2022.

While members of both parties have voted to delay the ObamaCare taxes in the past, some quarters still defend the taxes.

The Cadillac tax, in particular, has drawn support from a wide range of health economists who argue it discourages excessive health-care plans and helps to control runaway health-care costs.

Former President Obama’s administration also defended the tax on those grounds, splitting with congressional Democrats.

Delaying the three health-care taxes also deprives the government of billions of dollars in revenue, though in the past members of both parties have agreed to delay the taxes without paying for them.

Whitaker, from the medical device group, said relief is needed. 

“If we don’t have certainty we have to plan as if the tax is coming back,” he said. “It impacts the allocation of [research and development] spending in a significant way.”

 

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