Tax cut for the rich has consequences for the American health care system

The legislation approved by Congress would have dramatic consequences for the American health care system if it ever became law, say various analysts, because the proposed revision is not a health policy initiative as much as it is simply a tax cut for the rich.

The law would probably be a death sentenced for people with pre-existing conditions, whose premiums could rise under the new law instead of being restrained the way they are under the Affordable Care Act (ACA), also known as Obamacare.

The Republican alternative would allow insurance companies to charge a 30 percent surcharge on the premiums paid by people who let their policies lapse and have been uninsured for two months.

The Tax Policy Center estimates eliminating two taxes levied on high-income earners by Obamacare would save the top 0.1 percent of the American population about $195,000 each year.

Over the last decade, a gigantic share of America’s income and wealth gains has flowed to this group, the wealthiest one out of 1,000 households.

To make it into the 1 percent, you need to have, according to some estimates, at least about $350,000 a year in income, or around $8 million accumulated in wealth.

All told, the 0.1 percent now owns about as much wealth as the bottom 90 percent of America combined.

The reduction on their tax bills would come at a cost of roughly $27 billion, in 2015 dollars, which would no longer be available to subsidize health care for ordinary Americans. This would put hospitals at risk of serving uninsured people and getting stiffed on the bills.

Almost a half of New Jersey’s hospitals closed in the decades before Obamacare and other state measures helped stabilize funding disparities. Nothing in the proposed Republican law would stop more health care providers from being overwhelmed by uncompensated care.

The GOP also makes another backdoor effort to outlaw abortion by denying any subsidy for insurance plans that cover certain gynecological procedures and specifically de-funds Planned Parenthood, the top provider of women’s health services.

Obamacare prevents insurers from charging a 64-year-old more than three times as much as the premiums paid by a 21-year-old, but the GOP plan would let insurers charge older customer five times as much. States may also waive that rule, so insurers could charge older Americans an even higher ratio.

The Republican proposal also cuts federal funding for Medicaid by $880 billion, or 25 percent, over 10 years, which puts about 75 million low-income people from babies to nursing home patients, at risk of benefit cuts.

Another Obamacare provision the Republican would scrap prevents insurance plans from putting annual limits on the amount of care they cover, and it forbids lifetime limits on 10 essential benefits.

While 24 million Americans will lose health insurance coverage if the Republican plan becomes law, at least 40,000 people will dies each year and tens of thousands of others will face catastrophic costs as a result of medical emergencies.

 


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