Income separates the winners and losers in Republicans’ health care plans

WASHINGTON - House Republicans' newly unveiled plans rewriting the Affordable Care Act would create far different winners and losers compared with the law's existing system, by providing additional financial help to wealthier Americans while probably decreasing federal aid to those with lower and moderate incomes.

The 2010 health care law widely known as Obamacare, passed solely with Democratic support, provided the first federal money to help Americans earning up to 400 percent of the poverty level buy private health plans. Those above that income level received no premium subsidy at all.

By contrast, the new House GOP bills would create a glide path allowing individuals earning up to $75,000 a year and married couples earning as much as $150,000 to receive a refundable tax credit. Some Americans earning more than that also would get assistance, though in lessening amounts.

The proposed measures also would change Medicaid from an automatic entitlement to a per capita federal funding allotment to states, which over time would probably slow the rise in payments to the program.

These changes, aimed at curbing the federal spending on health care, reflect Republicans' fundamentally different vision of government's role. Rather than expand a social safety net for poorer Americans, at the risk of imposing financial burdens on future generations, they hope to set in motion free-market approaches that would change the way many Americans access health care.

The strategy represents a break with a goal dating to the 1960s Great Society programs of President Lyndon B. Johnson - that all Americans should have health insurance, regardless of income. Instead, the GOP favors a more fiscally constrained goal of providing Americans with different options to pursue that coverage.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, said in a statement Monday that his party aimed to rectify some of the ACA's negative consequences, falling more on middle-income Americans who do not get insurance through their employers. Those voters, who had to buy their plans through the individual marketplace without subsidies, have played a key role in conservative Republicans' ascendancy since the law's passage.

'Families can't afford their premiums, patients can't visit the doctor they like, and fewer insurers are offering coverage options every day,” Brady said. 'With President Trump, House Republicans are taking a stand.”

The Congressional Budget Office has not provided an analysis of how many Americans would gain or lose health coverage under the new legislation. But Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation, said in an interview Tuesday that it was already clear that more low-income people would have a hard time affording benefits.

'There will be more losers than winners.” Levitt said, adding that low-income people, people who are older and those in high-cost areas would lose.

Under the existing law, according to a Kaiser Family Foundation analysis, a 40-year-old earning $20,000 a year would get an average subsidy of $4,143 under the ACA, compared with a $3,000 refundable tax credit under the Republicans' American Health Care Act. Meanwhile, a 40-year-old earning $75,000 annually, who gets no subsidy now, would receive a $3,000 tax credit under the GOP proposal.

Certain aspects of the two measures target specific forms of health care for ideological reasons. A provision in the House Energy and Commerce bill would prohibit the spending of federal funds for one-year on any family planning clinic that 'provides abortions” except in cases where the pregnancy stems from rape or incest or threatens the life of the mother. The restriction would carry out conservatives' longtime goal of cutting federal support of Planned Parenthood.

Speaking to reporters Tuesday, Health and Human Services Secretary Tom Price said that while the White House wanted the House 'to work its will,” that provision meshed with the administration's overall stance on abortion. 'It's incredibly important that we not violate anybody's conscience,” he said.

Dawn Laguens, executive vice president of Planned Parenthood Federation of America, accused congressional Republicans of singling out the organization's clinics for punishment. 'This proposal would deny millions of women access to cancer screenings, birth control, and STD testing and treatment,” she said.

The elimination of several taxes that generate funding for the current subsidies, on the other hand, would benefit other health care players. The new Ways and Means Committee bill would abolish the 10 percent tax on indoor tanning services, a tax on health care providers and a 2.3 percent tax on medical-device providers.

At the same time, it would double what health insurers can deduct in terms of compensation for their top executives, up to $1 million per employee. That provision generated $72 million in tax revenue in 2013, according to the Institute for Policy Studies.