There's one thing that seems certain to come out of the negotiations on the omnibus spending bill and associated tax extenders bill Congress is now feverishly negotiating: A two-year delay in the implementation of the so-called "Cadillac tax" on high-value health insurance plans in Obamacare. The main reason this seems so likely isn't that it's championed by both Democrats and Republicans, but that Senate Minority Leader Harry Reid is leading the charge.
Reid has assured labor leaders that freezing the Cadillac tax on high-benefit insurance plans is a top personal priority, and he wants to get it done now, knowing he has only a year left as Senate Democratic leader. […]
"Leader Reid feels very strongly, in my opinion from discussions with him, that this needs to be done and it needs to be done now. And I think he is confident that will occur," said Harold Schaitberger, general president of the International Association of Firefighters, who met with Reid this past week.
The theory behind the tax on high-value plans is that providing really good health insurance makes people use it to get more healthcare, and increases overall healthcare spending. An additional theory says that if employers stop paying such high premiums on these plans, they'll start using that money on pay increases, a theory that doesn't seem to stand up to reality. The reason labor unions particularly dislike this policy is that unions have negotiated these good plans on behalf of their members while wages have remained stagnant.
There's also the very real possibility that the effect touted by the Obama administration and economists who like the tax—people will make fewer unnecessary visits to the doctor because they don't want to pay higher copays and deductibles—will also mean that people will make fewer necessary visits to the doctor. For example: "Patients with higher out-of-pocket obligations tend to be worse at taking their prescriptions and can end up with worse health as a result."
The tax is set to be implemented in 2018, but will now likely be delayed until 2020. That's actually a reprieve for the provision of the law, as there seems to be plenty of sentiment on Capitol Hill to repeal it entirely. But that does give the administration (and the next one) as well as lawmakers time to find replacement revenue. As for whether this will severely damage the law (which you're likely to hear from proponents of the tax who want to save it and from Republicans who will crow about damaging the law)? Probably not particularly, since it hasn't even been implemented yet.