Senate Health Care Reform Bill Just as “Mean” as the House Version

The Congressional Budget Office today released its score of the Senate Health Care proposal and the news is not good. It’s no wonder a narrow group of 13 lawmakers cobbled together the bill behind closed doors. Now that the measure has seen the light of day, we know that it epitomizes Robin Hood in reverse policies by snatching health coverage from 22 million people by 2026 (15 million in 2018) while showering tax cuts on the already wealthy.

In other words, if senators’ goal was an Obamacare repeal bill that would avoid joining its House counterpart as one of the most unpopular bills in history, mission not accomplished.

President Trump himself called the House bill, which would cause 23 million more people to be without health insurance that year, “mean.” Apparently, the Senate decided that trimming that number to 22 million would make the plan no longer mean. The bill makes it painfully obvious that the GOP’s goal is to enact tax cuts at any cost, even if it means tens of millions of people will no longer have access to health care.

According to CBO, the bill would reduce tax revenue by $701 billion over 10 years. A portion of that revenue is lost because certain provisions to encourage health coverage (such as tax penalties imposed on those going without health coverage) would be repealed. But the vast majority of that revenue would be lost because other taxes enacted as part of the Affordable Care Act would be repealed.

Of those provisions, the most significant ones affecting individuals are two taxes that ensure that the richest Americans contribute 3.8 percent of their income to support health care in America. ITEP has estimated that if these two provisions are repealed as envisioned in the Senate bill, 85 percent of the benefits would go to the richest 1 percent of Americans. No one outside the richest 3 percent would benefit at all.

ITEP’s state-by-state analysis found that repeal of these provisions would disproportionately benefit residents of Connecticut, New York, the District of Columbia and 10 other states. Most of these are not the conservative states where one might expect more support for repealing Obamacare. But then again, there apparently is no state where a majority supports this health care legislation.

Of these two provisions, one increased the Medicare tax on wages from 2.9 percent to 3.8 percent for those who earn more than $200,000 ($250,000 for married taxpayers). Before this was enacted, everyone paid 2.9 percent of their wages and salaries to Medicare, regardless of how rich they were.

The other provision imposed a tax of 3.8 percent on other types of income (like dividends, capital gains, interest) to ensure that people who live off their wealth are contributing just like people who work for their income. This tax only applies to those with incomes of more than $200,000 ($250,000 for married taxpayers).

Before these provisions were enacted, the only taxes that were dedicated to health care was the Medicare tax on wages, which was not progressive, exempted investment income and  mostly flows to the wealthiest Americans. Repealing these two milestones in tax fairness is bad enough. Forcing 22 million people to go without health care to finance their repeal is a step backward unlike anything this country has ever seen.

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