The American Health Care Act that House Republicans are planning to pass today has a lot of provisions that are worth trying to learn about and understand.
But there’s one provision that is far more important than all the rest: It cuts taxes by $600 billion and nonetheless reduces the deficit.
There are a lot of reasons you might want to cut taxes. But cutting taxes doesn’t provide more people with health insurance. Cutting taxes doesn’t lower premiums and deductibles for the insured. Cutting taxes doesn’t help protect people with preexisting conditions. Cutting taxes doesn’t bolster the long-term fiscal viability of Medicare. Cutting taxes doesn’t give patients more choice of doctors or insurance plans. Cutting taxes doesn’t improve preventive health or boost search for cures.
Cutting taxes, in short, doesn’t do anything to improve the quality of health care in the United States of America.
And we’re not talking about a small amount of money. It works out to approximately $5,000 worth of tax cuts per household. Except most households aren’t going to see their taxes cut at all because of which taxes the AHCA cuts.
- It eliminates a 3.8 percent tax that applied to capital gains, dividend, and interest income for families with $250,000 or more in income ($125,000 for singles).
- It eliminates a 0.9 percent tax on wage income in excess of $250,000 a year ($200,000 for unmarried people).
- It eliminates taxes on health insurance companies, pharmaceutical companies, and medical device manufacturers.
The typical American, in short, isn’t going to see any money from these tax cuts. But when you take all that money out of the system, something has to give. And in the case of the various iterations of Affordable Care Act repeal, the thing that gives is the quality of health insurance provided to Americans with below-average incomes or above-average health needs.
There are lots of ways you can rejigger the system to shift the burdens around, and there are real and meaningful differences between the various versions. But in a big-picture sense, you can’t take $600 billion out of health care and use it to finance tax cuts without ending up with worse health care. All the rest is details and footnotes.