Cost Growth

Paul Van der Water, a researcher at the Center on Budget and Policy Priorities, which advocates for policies that benefit low-income people and is frequently allied with the White House, said Obama’s proposal merits consideration.

“The tax has a strong policy rationale,” he wrote in a blog post on the group’s website. “It could slow health-care cost growth by discouraging firms from buying extremely expensive health coverage that promotes excess use and inefficient delivery of health care.”

The tax was key in financing the Affordable Care Act’s insurance coverage expansions, and was intended to slow the rise of health-care costs by putting pressure on employers to limit their benefits and push for lower prices from hospitals and doctors.

The year-end spending deal that Obama signed in December postponed the start of the Cadillac tax by two years, until 2020. The Congressional Budget Office said the delay would result in lost revenue of $17.7 billion over 10 years.

Orrin Hatch, the Utah Republican who chairs the Senate Finance Committee, maintained that the tax must be repealed.

“Putting a band-aid on the issue, as the administration’s proposal does, won’t fix the problem,” Hatch said in an e-mailed statement Wednesday. “Instead, we need to have this flawed tax repealed in its entirety once and for all.”

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