Affordable Care Act revision, Part 2

Rob from the poor, give to the rich?

(Note: this is my translation of House GOP health bill adds up to big tax cut for the rich, by Stephen Ohlemacher and Ricardo Alonso-Zaldiver into a graphic)

The President and the GOP have endorsed a plan to repeal and replace the Affordable Care Act. Part of this plan includes cutting the taxes that fund the program. This will reduce ACA revenues by $600 billion over the next decade.  $500 billion of these tax revenues will be 'distributed' as follows:

1. Savings of $158 billion for high-income individuals and families. 90% of this money will benefit earners in the top 1% who are making making $700,00 or more. The other 10% will mainly benefit earners in the top 5%.
2. Tax savings of $117 billion for individuals earning over $200,000 and married couples earning over $250,000. This action will drain the Medicare trust fund and violates President Trump's promise not to damage Medicare
3. By lowering the medical out-of-pocket health deduction threshold from $10,000 to $7,500, $35 billion will be kept by taxpayers.  The average medical deduction for American families earning less than $100,000 is about $7,500. Over $100,000 the itemized deductions exceed $10,000, thus the main beneficiaries will be earners in the upper 20%.
4. Savings of $145 billion on market share fees for health insurers.
5. Savings of $25 billion in fees for pharmaceutical companies and importers
6. Excise tax savings of $20 billion for medical device makers and importers
7. A savings of $400 million for insurance companies by repealing $500,000 limit on the amount of an executive's pay that the health insurance companies can deduct.

House Ways and Committee chair, Rep. Kevin Brady said that despite the lost tax revenue the overall bill will not add to long term budget deficits.  (This made me wonder if he expects to be uninsuring more Americans as a way of saving money . . . and I got my answer Monday!)

I did a lot of reading putting this graph together and came away with three things:

1. I agree with Sen Ron Wyden of Oregon,, "This bill sends a loud and clear message. Tax cuts for special interests and the wealthy matter more that your health care." Thus my snarky title, 'Rob from the poor, give to the rich'.  But, the truth be told, it was the wealthy's money to begin with.
2. The people who are struggling voted for Trump because he promised them work; they didn't vote for him to repeal the Affordable Care Act. It's not 'his' 59 million voters who don't earn as much as a member of Congress ($174,000) who are invested in repealing Obamacare; it's the 5% who own 63% of the country's wealth who want to get out from under Obamacare.
3. The Affordable Care Act is working as a way to provide health insurance for our poor and as a means to redistribute our wealth.  If Congress is going to improve the health insurance aspect, they will need to be circumspect about changing the rules and they will need to build confidence among the private insurers. If they are going to go about redistributing our wealth,  they need to identify the "elephant on the table" and deal with it.

REFERENCES:

1. House GOP health bill adds up to big tax cut for the rich, Stephen Ohlemacher and Ricardo Alonso-Zaldiver, Associated Press, Mar 7, 2017
2. Tax credits work differently in 'Obamacare' and GOP plan, by Stephen Ohlemacher, WMTW News 8, Mar 11, 2017
3. $250,000 a Year Is Not Middle Class, by Bryce Covert, The New York  Times, Dec 28, 2015
4. Who Are the Top 1% Income Earners?, by Financial Samurai, updated 2017
5. What Percent Are You?, by Andrew Van Dam, The Wall Street Journal, Mar 2, 2016
6. Making a killing under Obamacare: The ACA gets blamed for rising premiums while insurance companies are reaping massive profits, by Angelo Young, Salon, Oct 28, 2016
7. Healthcare shocker: These insurers are making money on Obamacare, by Michael Hiltzik, Los Angeles Times, Apr 27, 2016
8. Opinion: I'm a former health insurance CEO and this is what Obamacare repeal will do, by J B Silvers, MarketWatch, Jan 4, 2017
9. Better Off Before Obamacare?, by Olga Khazan, The Atlantic, Nov 14, 2016
10. The True Cost of Healthcare, by David Belk, MD and Paul Belk, MD, 2016
11. Pharma: an industry shaped by shareholder value, by Dan Bobkoff, Marketplace, Jun 15, 2016
12. Millions might lose health coverage? Not to hear Republican leaders tell it, by Philip Bump, The Wasington Post, Mar 12, 2017
13. The Average National Income Tax Deduction, by Tom Streissguth, Chron, 2010 data
14. Average Itemized Deductions, by Eric Scott and Brenda Au, 2011 data
15. The one tax graph you really need to know, by Ezra Klein, The Washington Post, Sep 19, 2012
16. How Does the ACA Individual Mandate Affect Enrollment and Premiums in the Individual Insurance Market?, by Christine Eibner and Evan Saltzman, Rand Health, 2015
17. 2017 Tax Guide, by Bankrate
18. Pharmaceutical industry gets high on fat profits, by Richard Anderson, BBC News, Nov 6, 2014
19. Key Facts about Uninsured Population, Kaiser Family Foundation, Sep 29, 2016
20. The House GOP Health Plan Makes Obamacare Look Good, by Alan S Blinder, The Wall Street Journal, Mar 13, 2017
21. CBO Sees 24 Million More Uninsured, $337 Billion Deficit Cut With GOP Plan by Stephanie Armour and Kristina Peterrson, The Wall Street Journal, Mar 13, 2017
22. Wealth inequality in the United States, Wikipedia
23. Tax Savings from Repealing Obamacare, by Kevin Drum, Mother Jones, Mar 21, 2017