Affordable Care Act repeal could cost the poor a third of their income
NEW YORK– The poorest American families could lose federal benefits worth a third of their income, on average, if the House Republican health care bill becomes law, according to a new report.
At the same time, the richest households would receive a tax break of $5,640 a year, according to the study conducted by the Urban Institute and the Urban-Brookings Tax Policy Center, which looks at the impact on families with different incomes in 2022.
The legislation, which is expected to be voted on Friday, would hit those making less than $10,000 a year so hard because these folks receive hefty amounts of government assistance from Obamacare. Many benefit from the expansion of Medicaid to low-income adults, while those who earn just a bit more receive generous subsidies that lower their premiums, deductibles and co-pays.
The GOP bill, titled the American Health Care Act, would eliminate the enhanced federal funding for Medicaid expansion and cap federal support of the entire program. It would also replace Obamacare’s subsidies with less generous tax credits based mainly on age, rather than income. (Individuals who earn more than $215,000 and couples making more than $290,000 don’t qualify for tax credits, under the GOP bill.)
On average, families who earn less than $50,000 a year would be worse off under the bill, researchers concluded.
A Congressional Budget Office report found that 24 million fewer people would be insured in 2026, including 14 million who would have had Medicaid, if the GOP bill becomes law.
On the flip side, the House bill would jettison two taxes that fall on individuals making more than $200,000 and couples making more than $250,000, starting this year. So wealthier taxpayers would benefit most from the bill.