House Democrats and Republicans joined in a rare show of unity Wednesday, voting overwhelmingly to repeal an unpopular tax on generous health insurance that’s a symbol of former President Barack Obama’s signature health care law.

The nonpartisan Kaiser Family Foundation expects that about one in five employers offering health insurance would have at least one insurance plan subject to the tax in 2022, and the share would grow quickly over time.

A broad coalition of business groups and unions is pushing to kill the Cadillac tax, while policy experts have mounted a lonely defence. Unions oppose a tax on health benefits because health insurance is one of the most important issues for their members, and union plans are generally a cut above what non-union employers offer.

The so-called “Cadillac tax” never went into effect, since lawmakers kept delaying it. Wednesday’s 419-6 vote increases chances that the Senate will follow the House, going for full repeal.

Beginning in 2022, the tax would slap a 40 per cent levy on the value of health insurance plans above USD 11,200 for single coverage and USD 30,100 for family policies.

Insurers and employers oppose the tax because they’d be the ones most exposed to its bite. About 160 million Americans are covered by workplace plans, still the largest source of coverage.

Despite the political risks of tampering with employer coverage, policy experts and economists across the political spectrum argued that the tax would start to get at a fundamental reason behind high US health care costs.

Economists see health insurance benefits as another form of compensation. While the government taxes salary and hourly wages, the value of job-based health insurance is tax-free to workers and tax deductible for employers.

Economists see that as an incentive to over-spend on health care, creating an income stream that enables hospitals, drug companies, and medical specialists to charge high prices and subsidising services of questionable value.