3 ACA Taxes Slated for Repeal in Spending Bill

Government will lose out on $373.2 billion if Cadillac tax, device tax, and HIT are nixed as expected
Robert Calandra

Repeal of three ACA taxes is part of the spending agreement that Congress is expected to pass this week.

The bipartisan spending deal includes repeal of the 40% tax on generous “Cadillac” health insurance plans, the 2.3% medical device tax, and the Health Insurance Tax, or HIT.

None of the taxes are currently in effect, although the insurance and device levies were scheduled to resume in 2020.

The Cadillac tax on high-cost health plans, has never been implemented but, until this spending deal, had been slated to start 2022. The ACA's architects came up with it as a way to curb health care spending by taxing generous coverage. But neither Republican nor Democrats—because of union opposition—ever had much appetite for the Cadillac tax. The House passed a bill earlier this year by a massive 419-6 margin to repeal the tax. 

An analysis released Tuesday by Congress’s Joint Committee on Taxation, which is associated with the Congressional Budget Office, estimated that the repeal of these three taxes would cost the federal government $373.2 billion in lost revenue over 10 years. Repeal of the Cadillac tax, at $196.9 billion is the largest chunk, followed by $150.8 billion from the HIT repeal, and $25.5 billion from no  device tax.