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House approves $1.1 trillion budget extending 'Cadillac' tax on high cost health plans for 2 years

By Healthcare Finance Staff

The House on Friday approved a $1.1 trillion spending bill that, with a tax package approved last week, includes changes to ObamaCare including another delay in the implementation of the Cadillac tax on high cost employer health plans.

The Cadillac tax was scheduled to take effect in 2018, when the government was to have imposed heavy financial penalties on employer-provided health plans it deemed overly generous. The plans would be taxed on the amount surpassing an annual limit.

Lawmakers approved the spending bill 316 votes to 113, according to The Hill. The Senate is expected to pass the package later today, The Hill said, after pairing it with a massive tax package approved by the House on Thursday. The White House has said President Obama will sign both measures.

The bill also includes a two-year suspension of the medical device tax.

The 2.3 percent tax to be levied on medical device manufacturers and importers was a provision of the Affordable Care Act that was projected to raise $29 billion over 10 years.

Opponents have said the tax would only be passed on from the medical device companies to hospitals.

The tax was designed to rein in healthcare inflation and raise as much as $60 billion by 2023, according to the Congressional Research Service. It was opposed by many healthcare companies, business groups and the U.S. Chamber of Commerce.

Representatives reached an agreement on the tax package before midnight Tuesday, and on the $1.1 trillion omnibus spending bill early Wednesday morning before voting on Friday. Passage of the budget keeps the government open through September 2016.

The spending bill includes a major concession to Democrats in the continued federal funding of Planned Parenthood.

Twitter: @SusanJMorse

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