New Analysis Shows Trumpcare Helps Wealthy Americans the Most
Last week the Republican controlled U.S. House of Representatives unveiled its plan to replace the Affordable Care Act aka Obamacare. The new plan has the official name of “the American Healthcare Act” but, over objections from the White House, people are already calling is “Trumpcare.” Early analysis of the legislation shows that the people who will benefit from the new plan are the wealthiest people in the country.
Trumpcare will change the way the Medicaid program works
The reason for that is two-fold. Trumpcare does a lot to change Medicaid. It does this in two ways. Medicaid is a program that provides the poorest in the country with health care. Currently, the program is paid for through a state-federal government partnership. The federal government reimburses the states for a percentage of their costs. This amount changes from year to year as the number of enrollees changes. Under the new plan, the federal government would pay that states a lump sum, also called a “block grant.” This would be based on the number of enrollees in 2016 and would not change.
The second way the bill changes Medicaid is the expansion that was initiated under Obamacare. Many states, such as Iowa and Ohio (two important states in American presidential politics), opted to accept the expansion. Because more people became eligible for this, millions of people who live at or near the poverty line gained access to healthcare. Trumpcare ends this and all of these people will lose their coverage. This can leave up to 10 million people without access to healthcare.
The rich will pay less in taxes.
There were several taxes that Obamacare created. Under Obamacare, millionaires pay more in taxes. New estimates, by the bi-partisan Joint Committee on Tax Reform, show that people who make more than $1 million would get the most in tax savings. Anyone who makes between $500,000 and $1 million each year, would receive a tax cut of approximately $55 billion over the next ten years. For people who make between $200,000 and $500,000, the savings are more modest. Their tax burden would go down by about $53 billion over the same time period.
Another big difference in how the two plans allocate government help. Obamacare looks at a person’s income when determining the amount of help they get. Trumpcare does not look at that. The latter plan looks only at a person’s age. The Kaiser Family Foundation has an interactive page that compares the two plans. The graphic below shows how a 40 year old who makes $100,000 would fare under the new legislation vs. the current law. That individual would get a tax break that is 75% greater (or more) than what they get now.
By contrast, a person who is 40 years old but only brings in $20,000. The blue shows how much worse that person would do under Trumpcare. Under the proposal, the tax credits they would receive would be reduced, for the most part.
The bill has passed its first two legislative hurdles. It is expected to reach the floor of the House by the end of March. Here is video of House Speaker Ryan’s (R-WI) presentation on the American Healthcare Act of 2017.
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