(Bloomberg View) — After dozens of futile votes to repeal the Patient Protection and Affordable Care Act (PPACA) — Obamacare — Republicans in Congress may have finally found a winning strategy: Delay or suspend the taxes that pay for the program, and enfold the provisions in a larger spending bill that has to pass.
Even congressional Democrats are on board with the plan — at least this year. But these taxes are crucial to the success of health-care reform, and Democrats need to ensure the delays and hiatuses remain temporary.
Each of three taxes targeted in the spending bill is defensible on its merits. The first, the so-called Cadillac plan tax on high-cost employer-sponsored health plans, does more than just help to pay for Obamacare; it's also meant to help control health-care costs by giving employers an incentive to direct less compensation toward health benefits and more toward wages. The design of the tax could be improved, but the goal of lower costs is beyond dispute. By delaying the tax for two years, the bill sets back that goal.
The other Obamacare taxes frozen by this deal don't do as much to promote efficiency, but they're important in helping to pay for the law. One of the effects of Obamacare has been to increase the revenue of many health-care providers. So the law taxes some of that new revenue — including a 2.3 percent tax on sales of medical devices and an annual fee on health insurers. The spending bill lifts the device tax for two years and the insurance tax for one.
