Study: Re­peal­ing Obama health law cuts taxes for wealthy

Kuwait Times - - HEALTH & SCIENCE -

WASH­ING­TON: Repub­li­cans may be hand­ing wealthy Amer­i­cans a big tax cut by re­peal­ing Pres­i­dent Barack Obama’s health care law, ac­cord­ing to a study re­leased Thurs­day that spells out po­ten­tial eco­nomic pit­falls be­hind the elec­tion-year slo­gans. The rich­est house­holds - those with in­comes above $3.7 mil­lion would get an av­er­age tax cut of about $197,000, said the anal­y­sis from the non­par­ti­san Tax Pol­icy Cen­ter, a joint ven­ture of the Ur­ban In­sti­tute and the Brook­ings In­sti­tu­tion think tanks.

The wind­fall would come mainly from the re­peal of taxes that the Af­ford­able Care Act aimed at up­per-in­come earn­ers, in­clud­ing an in­vest­ment tax and a Medi­care levy.

The study comes as Repub­li­can law­mak­ers and aides start grap­pling with the com­plex­ity of un­rav­el­ing the 2010 law, which touches most ma­jor play­ers in the $3 tril­lion health care in­dus­try.

While Repub­li­cans plan to take just a few months next year to pass leg­is­la­tion dis­man­tling the law, that “re­peal” may not ac­tu­ally take com­plete ef­fect for up to four years, top House GOP aides told re­porters Thurs­day. Congress would need the time to pass re­place­ment leg­is­la­tion and work out a smooth tran­si­tion. The Tax Pol­icy Cen­ter study did not con­sider the im­pact of re­place­ment leg­is­la­tion, so its look at po­ten­tial win­ners and losers is pre­lim­i­nary. Pres­i­den­t­elect Don­ald Trump and GOP con­gres­sional lead­ers have promised to re­place “Oba­macare” with a con­ser­va­tive-tinged ver­sion that pro­vides ac­cess to af­ford­able cov­er­age for all Amer­i­cans. De­tails of that plan are un­avail­able, but it’s bound to af­fect the fi­nal bot­tom line.

The “re­peal” part of the GOP prom­ise would def­i­nitely have one-sided con­se­quences, said Gor­don Mer­min, an Ur­ban In­sti­tute re­searcher who con­ducted the study. “This is a change that helps high-in­come folks more than every­one else,” said Mer­min.

“Peo­ple who cur­rently get these pre­mium tax cred­its are go­ing to lose a lot.”

The im­pact is more com­pli­cated for mid­dle­and low-in­come house­holds. The vast ma­jor­ity would see lit­tle or no change in taxes. Re­peal of var­i­ous taxes on the health care in­dus­try would get passed through as mod­est ben­e­fits for most. But more than 8 mil­lion con­sumers re­ceiv­ing tax cred­its through the law to help pay for health in­sur­ance could take a sig­nif­i­cant hit. They would lose fi­nan­cial as­sis­tance worth sev­eral thou­sand dol­lars. How big a loss de­pends on in­di­vid­u­al­ized fac­tors such as house­hold size and fam­ily in­come. The study did not look at the im­pact on in­sur­ance cov­er­age. Obama’s law has helped drive the na­tion’s unin­sured rate to a his­toric low of about 9 per­cent. A separate Ur­ban In­sti­tute study ear­lier pro­jected that nearly 30 mil­lion peo­ple could lose cov­er­age if Obama’s law is re­pealed with­out a re­place­ment.

GOP aides who briefed re­porters Thurs­day on Capi­tol Hill said a sta­ble and or­derly tran­si­tion is one the party’s top goals. The aides spoke on con­di­tion of anonymity to dis­cuss the broad out­lines of a pri­vate di­a­logue among Repub­li­can de­ci­sion-mak­ers.

The long tran­si­tion pe­riod un­der con­sid­er­a­tion - two to four years - re­flects a de­sire to avoid dis­rupt­ing ex­ist­ing cov­er­age for con­sumers and to give law­mak­ers time to cre­ate a new health care pro­gram. It’s an ex­er­cise fraught with pol­icy and po­lit­i­cal com­pli­ca­tions. Four years would put Repub­li­cans on the thresh­old of the next pres­i­den­tial elec­tion.

Dur­ing that pe­riod, Repub­li­cans hope to write re­place­ment leg­is­la­tion, per­haps with sev­eral bills whose pro­vi­sions would kick in stage by stage. —AP

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