Not understanding the AHCA

I’ve had conversations with many people, who just do not understand what “good” the AHCA does. “How can they be in favor of a bill that would eventually cost many their health insurance and weaken the coverage of many that already have it?”

The Republicans lie, of course. They say Obamacare is in a “death spiral.” No, it isn’t. Yes, premiums have gone up (more sick people in the system) but when haven’t insurance premiums NOT gone up? There were supposed to be subsidies to help offset those but doubt was raised about such subsidies being fully funded. So, one could say that Republicans are trying to sabotage the ACA.

While I acknowledge that some libertarians are hostile to the idea that people have to have health insurance, here is what I see as being the main issue for the elite Republican political leadership:

Eliminate the Medicare surtax on wages: High-income earners currently pay the 1.45% Medicare payroll tax on wages up to $200,000 ($250,000 if married). But then they pay an additional 0.9 percentage points — or 2.35% – on wages above those levels.
Under the House bill, that 0.9 percentage point surcharge goes away in 2023 — a delay from the original legislation, which would have nixed it in 2018. The enactment date was pushed back to free up some money to augment tax credits for Americans in their 50s and early 60s, who would face much higher premium costs under the GOP bill, since it would let insurers charge older consumers more than they can under Obamacare.
Related: How the Republican bill would change Obamacare
Get rid of the Medicare tax on investments: In addition to the surtax on wages, high-income earners making more than $200,000 ($250,000 if married filing jointly) are subject to a 3.8% Medicare tax on a portion of their investment income, which is determined by formula. Investment income includes money from capital gains, dividends, interest, rental income and annuities.

Politifact said that the claim that the wealthiest among us would receive most of the tax cut benefits as being “half true” because:

$122 billion to a variety of individuals through tax changes:

$49 billion: Postponing the so-called Cadillac tax on high-cost health plans actually helps middle-income taxpayers, the Tax Policy Center says.

$35 billion: Allowing more tax deductions for medical expenses — starting at 7.5 percent of income, rather than 10 percent. This tends to help middle- and upper-income people, given that the rich are well insured and the poor don’t pay income taxes.

$19 billion: Repealing a cap of $2,500 on the pre-tax dollars workers could put into flexible spending accounts annually. Poorer people can’t afford to put more than $2,500 aside for medical expenses, but this change benefits middle-income folks as well as the wealthiest.

$19 billion: Increasing, to $6,550 for an individual and $13,100 for couples, the amount that could be put annually into a Health Savings Account. Similar impact as the pre-tax change.

Basically, it would help some of the “lower end” 6 figure and up people.

And they conclude this:

Not all of the $600 billion in tax breaks (over 10 years) would go to the wealthiest Americans.

But nearly half — $275 billion — would almost exclusively benefit only people on the highest end of the income scale.

So, that is what they care the most about. We’ll see what tweaks the Senate comes up with.

Bottom line: they want those tax cuts, and they need to cut spending enough for the bill to be able to be passed in the Senate via reconciliation rules. That’s really it. Now, what tweaks to do? They have to balance the Ted Cruz vote with the few moderate vote, and it will probably have to go back to the House again.


June 22, 2017 - Posted by | political humor, political/social, politics, social/political |

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