Last week, the Republican-controlled Senate and House began the first steps in repealing President Obama’s landmark Affordable Care Act, with no semblance of a real replacement plan in sight.
Health-care coverage for the roughly 20 million Americans who gained access under Obamacare is now in serious jeopardy—a life-threatening prospect for many. Beyond that, the cost of repeal (without a replacement) is astronomical. A new report from the Congressional Budget Office, which scored the costs of the Republicans’ 2015 repeal, found that 18 million people would lose their insurance within the first year, and premiums for all would climb by as much 25 percent. After the elimination of Medicaid expansion and insurance subsidies, the number of uninsured would increase to 32 million by 2026 and premiums would be about 50 percent higher.
In short, repealing the law without a replacement plan could be a political disaster for Republicans—and yet, it remains their top priority. That’s probably because the GOP’s Obamacare repeal—quarterbacked by Paul Ryan and Mitch McConnell—is, at its core, a thinly veiled trickle-down policy of tax cuts for the rich. Because the Affordable Care Act is funded largely through a progressive measures—taxes on the wealthy and corporations that fund subsidies for low- and middle-income households—repealing it would directly shower the nation’s rich with huge tax breaks, while everyone else would either see a tax hike or no discernable tax benefit at all.
The top 0.1 percent would receive, on average, a tax cut of about $197,000—an after-tax income boost of 2.6 percent—according to the Tax Policy Center.
Tax savings at the very, very top would be even greater. By repealing the two Obamacare taxes (the Hospital Insurance tax and the Medicare tax on unearned income), the country’s 400 wealthiest taxpayers—whose annual incomes average roughly $300 million—would each receive a tax cut of about $7 million a year, according to an analysis by the Center on Budget and Policy Priorities.
For these 400 mega-millionares, that's a total tax cut of a whopping $2.8 billion a year. As the analysis found, that tax break is the same value as the premium tax credits that enable some 800,000 Americans of modest means in 20 states and Washington, D.C., to purchase insurance on the ACA exchanges.
Meanwhile, the roughly 160 million households earning less than $200,000 a year would see no benefit from the repeal of those taxes. In fact, repeal would mean a significant tax increase for seven million low- and moderate-income households.
Furthermore, the repeal of Obamacare would generate massive tax breaks—about $180 billion, according to an earlier CBO report—for pharmaceutical companies, health insurers, and medical device manufacturers. Eliminating the tax on brand-name drug importers and manufacturers would result in $130 billion in lost revenue over ten years. Repealing the program’s “HIT” tax on health insurance companies and the tax on medical device manufacturers—both of which are top political priorities of the U.S. Chamber of Commerce—would lead to an estimated loss of $130 billion and $20 billion respectively.
The permanent tax savings secured for the wealthy with the Republicans’ removal of the Affordable Care Act could become the 1 percent’s largest tax break of the year—and that’s in a year where proposed GOP tax reforms are supposed to heap additional massive tax cuts on them already.
For this ostentatious preference for private wealth over public health, the Republicans leading the charge to repeal Obamacare are our Trickle Downers of the Week.