By Sarah Ferris – 04/27/15 01:10 PM EDT
A group of House Democrats are pushing to repeal ObamaCare’s so-called “Cadillac tax,” which they say unfairly targets people in more expensive areas like the Northeast and West Coast.
Reps. Joe Courtney (D-Conn.), Donald Norcross (D-N.J.) and Dina Titu (D-Nev.) will unveil legislation Tuesday to eliminate the tax on the country’s most expensive insurance plans.
The tax, which goes into effect in 2018, is based on the cost of premiums, which the lawmakers point out are higher in areas with more expensive health costs.
“The excise tax is an unnecessary change that would adversely impact beneficiaries in high-cost areas,” Courtney’s office said in a release Monday to announce the bill, called the Middle Class Health Benefits Tax Repeal Act.
Many Democrats, including President Obama, have supported the tax on high-cost insurance plans, arguing it will only impact only the wealthiest Americans.
Healthcare customers who receive benefits above $10,200 for individual coverage and $27,500 for family coverage will be forced to pay a tax of 40 percent.
Republicans, as well as some Democrats, have blasted the tax because it is tied to general cost of living measures, rather than growth in healthcare costs.
The tax, which is intended to help finance ObamaCare, has been significantly scaled-down from the Senate-passed healthcare bill. Under that bill, individuals with $8,500-a-year plans and families with $23,000-a-year would have faced the tax.
The House-passed bill did not include the tax, meeting the demands of nearly 200 Democrats who had opposed it. The House version became law.