Paul N. Van de Water, a senior fellow at the Center on Budget and Policy Priorities, a liberal research center, described the tax as “one of the A.C.A.’s most important cost-containment measures,” and said that by curbing the growth of health insurance costs, it could have the effect of allowing for more wage increases.
“Unfortunately a lot of what Congress has been doing in recent years seems to be ignoring the budgetary consequences,” he said. “The general question is, what’s the overall deficit picture? The answer is, it’s not as good as it should be and we shouldn’t be making it worse.”
But for Democrats, a key constituency is demanding repeal — organized labor. For decades, unions found it easier to bargain for richer benefits than higher wages, producing labor-sponsored health plans that now could face the tax.
On Monday, the A.F.L.-C.I.O., which represents more than 12 million workers, sent a letter to House members saying the tax was “driving employers to hollow out the health care benefits they provide, making medical care less affordable and creating serious access barriers for millions of workers.”
The letter, written by William Samuel, the union’s director of government affairs, warned that workers would face increasing out-of-pocket costs as their employers reduced benefits to avoid being subject to the tax. It also questioned the premise, used in projections of the tax’s budgetary impact, that employers would increase wages after the tax compelled them to reduce benefits.
“Even when workers are represented by union negotiators,” Mr. Samuel wrote, “losses in health care coverage do not result in commensurate higher earnings for workers.”
Senator Martin Heinrich, Democrat of New Mexico, is sponsoring a companion bill in the Senate, which already has 42 co-sponsors, including 21 from each party. Heather Meade, a spokeswoman for the Alliance to Fight the 40, a coalition of corporations, unions, local governments and others that formed in 2015 to fight the tax, said its members remained optimistic that the Senate would vote before the end of the year.