Wealthier and younger Americans would be the big winners if Congressional Republicans replace Obamacare subsidies with tax credits, a new Kaiser Family Foundation analysis finds.
But many middle class folks would come out ahead, too.
Republican lawmakers want to provide age-based refundable tax credits to help people buy health insurance. The tax credits would range from $2,000 for those under age 30 to $4,000 for those between 60 and 64, according to a draft of the GOP’s replacement bill.
These would replace Obamacare’s subsidies, which are also refundable tax credits. But the Obamacare subsidies are based on an enrollee’s income and the cost of coverage in their area so the size of the subsidy varies widely.
Kaiser calculated how single Americans at three different ages and three income levels would fare under the two systems.
A wealthier enrollee wins under the GOP plan at any age. That’s because anyone making more than $47,520 — or 400% of the poverty level — isn’t eligible for subsidies under Obamacare. But the Republican plan would give people up to $4,000 a year to buy insurance, regardless of their income.
Younger Americans would also benefit because they pay considerably lower premiums than older folks. That means the size of their Obamacare subsidies are also lower. So many would receive more from the Republican proposal since it is not tied to the cost of insurance.
For example, a 27-year-old making $40,000 a year would receive $2,000 under the GOP plan, but only gets a $103 subsidy from Obamacare, on average, the Kaiser analysis found. A 40-year-old with that income also benefits from the Republican plan, receiving $3,000 versus $1,021 under Obamacare.
But a 60-year-old who makes the same amount has to pay a much higher premium. He or she would get only $4,000 from the Republican plan, instead of $6,752 from Obamacare, on average.
Lower-income folks making $20,000 a year take the biggest hit at any age under the GOP plan, Kaiser found. A 27-year-old would get only $2,000, instead of $3,225 under Obamacare, on average, while a 40-year-old would get $3,000 versus nearly $4,143.
However, the biggest loser is the 60-year-old lower income American. He or she would receive only $4,000, instead of $9,874 under Obamacare.
Some GOP lawmakers, however, have said they won’t support the bill in part because tax credits based only on age could wind up giving government assistance to the wealthy.
“So you can be a millionaire and not have employer-based health care and you’re going to get a check from the federal government — I’ve got a problem with that,” said Republican Mark Meadows, the chairman of the conservative House Freedom Caucus.
