- The wealthiest Americans stand to receive billions in tax cuts if the Affordable Care Act is struck down in court, according to a new study released Monday from the Center for Budget and Policy Priorities, a progressive think tank.
- The research found that if a Trump administration-backed federal lawsuit is successful in overturning the healthcare law, the richest taxpayers would reap substantial benefits as it would eliminate several taxes implemented to pay for the law's expansion of Medicaid in 37 states so far.
- The revenue was also used to pay for refundable tax credits used to help moderate-income people afford health insurance on the marketplace exchanges set up under the law.
- "The net-result would be to take tens of billions of dollars each year that the federal government is spending on coverage and redirect them towards taxes primarily going to people with incomes over a million dollars a year," lead study author Aviva Aron-Dine told Business Insider.
- Visit Business Insider's homepage for more stories.
The wealthiest Americans stand to receive billions in tax cuts if the Affordable Care Act is struck down in court. That's according to a new study released Monday from the Center for Budget and Policy Priorities, a progressive think tank.
The research found that if a Trump administration-backed federal lawsuit is successful in overturning the healthcare law, the richest taxpayers would reap substantial benefits as it would eliminate several taxes implemented to pay for the law's expansion of Medicaid in 37 states so far.
The revenue is also used to pay for refundable tax credits that help moderate-income people afford health insurance on the marketplace exchanges set up under the law.
One of them is a 0.9% Medicare tax levied on couples earning over $250,000 a year or $200,000 for single-filers. Another is a 3.8% tax on investment income for high-income married or single-filers earning the same amount of money as mentioned.
Aviva Aron-Dine, vice president of health policy at the Center for Budget and Policy Priorities, told Business Insider that 20 million people could lose their insurance coverage as the richest Americans effectively get a tax cut if the law is undone.
"The net-result would be to take tens of billions of dollars each year that the federal government is spending on coverage and redirect them towards taxes primarily going to people with incomes above a million dollars a year," Aron-Dine said.
Here are key findings of the study:
- Households with incomes over $250,000 for couples (or $200,000 for single-filers) would receive tax cuts worth $45 billion a year. 6.2 million people would lose their insurance in similar-sized budget cuts to federal insurance programs in 37 states.
- Rich households - or those with incomes over $1 million - would receive tax cuts averaging around $46,000 each, totaling $34 billion. It's roughly equivalent to premium tax credits for seven marketplace consumers or the federal cost of expanding Medicaid for eight adults.
- The 1,400 richest taxpayers - or those with annual incomes over $53 million - would get tax cuts equaling $3.8 billion. It surpasses the healthcare law's tax credits for 600,000 individual marketplace consumers in 18 states.
- Pharmaceutical companies would have their taxes cut by $2.8 billion while at least five million seniors would have to pay over $1,000 a year for prescription drug spending. Obamacare levied a fee on pharmaceutical companies selling branded drugs.
The study noted that steep coverage losses could occur in California, Texas, Florida, Ohio, and Michigan as the result of losing federal funding.
A review of studies of the Medicaid expansion's effects from the Kaiser Family Foundation found the law was successful in sharply reducing the number of uninsured Americans.
A decision from a federal appeals court in New Orleans on the law's constitutionality is expected any day now. At the center of the case is whether the elimination of the individual mandate compelling people to buy health insurance or face a tax penalty renders the entire law invalid. The mandate was revoked in the 2017 GOP tax law.
"This is a law touching nearly every aspect of our healthcare system," Urban Institute healthcare policy fellow Linda Blumberg previously told Business Insider. "It's hard to imagine how invalidation would work."
The open enrollment period started on Friday and the health-care law is starting to show signs of stabilization after several years of uncertainty. Premiums for the most popular Obamacare insurance plan is set to drop four percent next year and there are more insurers available for consumers to choose from.