The proposed Republican health care plan that may replace the Affordable Care Act, also known as Obamacare, reportedly contains large tax breaks for wealthy people, while millions of Americans will likely lose their coverage (video below).
Under Obamacare, insurance companies could only deduct $500,000 from taxes for each top executive's pay, but under the GOP plan those same companies will be able to deduct $1 million per executive, in addition to "performance-based" stocks and options, the Los Angeles Times reports.
Lee Fang, a reporter for The Intercept, tweeted on March 7 that Health and Human Service Secretary Tom Price -- who is in charge of health care -- "said he didn't know about the tax break for insurance CEOs in the GOP health bill: same provision was in his own 2015 budget bill."
John McDonough, a professor at the Harvard T.H. Chan School of Public Health, told Democracy Now! on March 7 that a big part of the funding for Obamacare comes from a tax on the wealthy, which the GOP plan would reverse:
And just to give you some perspective on this, the bill that the Republicans put out would repeal these taxes. The 400 wealthiest households in America, because of this tax cut, will see annual tax cuts of $7 million per household. The 160 million households with incomes below $200,000 will get zero from this, except some 10 to 20 million will lose health insurance coverage because of this law.
One Republican talking point has been how people will no longer be required to buy health insurance under Obamacare's mandate, or suffer a penalty of up to $695.
McDonough said Americans who go without health care insurance for more than 63 days in a year will pay a much larger penalty -- directly to the insurance industry -- under the GOP plan:
The Republican plan gets rid of that. It reduces all those penalties to zero. And it puts in place a different kind of a penalty. And the penalty says that if in the prior year, in the prior 12 months, you had a gap in health insurance coverage of more than 63 days, then when you go back to buy health insurance, you will pay a premium on top of your premium that will represent 30 percent more.
So let’s say that I want to -- I had a gap in coverage, and I want to buy health insurance in the following year, and I want to buy an individual policy that costs me, let’s say, $7,500 in a premium. So I would pay on top of that a penalty of an additional $2,200.