Center on Budget & Policy Priorities - The Republican Study Committee health plan ... would repeal all of the ACA by January 1, 2018, including the Medicaid expansion and the marketplace subsidies, which make coverage affordable for low- and moderate-income individuals. The estimated 20 million people who’ve gained coverage under health reform would lose it. And the millions expected to gain coverage under health reform in the future would remain uninsured.
In place of the Medicaid expansion and subsidies, the
plan would offer a standard tax deduction of $7,500 for individuals and
$20,500 for married couples, applicable to both income and payroll
taxes, to people who buy coverage on their own or through their
employer. But, as our analysis of the RSC’s nearly identical 2015 health
plan explained, this would do little to help most uninsured people gain
Here's why. Before health reform, at least 90 percent
of the uninsured were in the 0, 10, or 15 percent income tax bracket;
half had incomes below the poverty line and thus likely owed no federal
income tax. So the overwhelming majority of the uninsured would get an
income tax benefit of no more than 15 cents for every $1 they deduct
(most would get less), along with a payroll tax benefit of 7.65 cents
per dollar earned. These amounts aren’t enough to make coverage — other
than flimsy coverage — affordable.
People who lose their jobs and
have no earned income would get nothing from the deduction. The biggest
benefits would go to people in the top income tax brackets, who least
need help affording health insurance and are the most likely to already
Also, the deduction wouldn’t account for differences in
people’s premiums, even though the plan would let insurers charge much
higher premiums based on health status (assuming people with
pre-existing conditions could buy coverage at all) and charge older
people and women much more than younger people and men.
the plan would eliminate the tax exclusion for employer contributions
to the cost of their workers’ health insurance, which encourages
employers to offer coverage. As our earlier analysis found, this would
likely cause many employers — particularly small and medium-size firms —
to drop coverage. It would also drive up premiums for employers that
still provide coverage and have older and sicker workforces. Many
workers who rely on employer-based coverage today, especially those in
poorer health, would likely end up uninsured, on top of those who’d lose
coverage due to health reform’s repeal.