Senate Republicans reworking Obamacare are considering taxing employer-sponsored health insurance plans, a move that would meet stiff resistance but which would help make the tax preferences for health insurance more equal. The move could raise billions in revenue that could be used to help stabilize the fragile individual insurance market. But it could be politically risky, since it could expand the impact of GOP health proposals from Medicaid recipients and those who buy insurance on their own to the roughly 177 million people who get coverage through their employers.

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Democrats in California’s state Senate spent Thursday hemming and hawing over Senate Bill 562, the Healthy California Act. The legislation would create a single-payer health care system to cover all Golden State residents. This proposal would kneecap California’s economy and saddle millions with the life-threatening wait times, rationed care, and out-of-control costs that plague all single-payer systems. The Healthy California Program would cover all medical expenses without premiums, deductibles, or copays. Such a sweeping overhaul won’t come cheap. An analysis from the state Senate Appropriations Committee puts the cost of the plan as originally proposed at around $400 billion a year.
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The Trump budget assumes Obamacare repeal. On the tax side of this, it particularly assumes repeal of the 3.8% point surtax on capital gains, dividends, and other savings (known as the “net investment income tax,” or NIIT). There are approximately 20 other new or higher taxes in Obamacare that also will be repealed. Tax reform assumes they are gone before starting on a new system.

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Health insurers and small businesses are pushing their long-sought goal of abolishing Obamacare’s health insurance tax as lawmakers work to repeal and replace the healthcare law.

The tax is a priority for insurers even as negotiations have centered on the Obamacare repeal bill and federal insurance payments.

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In what will be a busy week in Washington, the Republican House hopes to take another whack at ObamaCare reform, a large chunk of which is Medicaid. As if this were not enough to handle, Donald Trump promises a “big announcement” Wednesday about his tax plan, which will likely include cuts in the corporate tax rate.

Let us stipulate that Medicaid reform and corporate tax cuts are both excellent initiatives. Done properly, each would offer Americans, including those at the lower end of the income scale, a better deal than they have now. Unfortunately, pitching health-care reform as the way to help “pay for” corporate tax cuts undermines the best arguments for both.

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The Wall Street Journal makes an important point today about a subset of the Obamacare repeal fight: the lobbying to repeal the law’s taxes, like the ones on medical devices and investment income for the wealthy. It gets more complicated to get rid of them, the Journal points out, if President Trump and Congress don’t reach some kind of resolution on Trumpcare. That would shift all of the lobbying for repeal of those taxes to the tax reform fight, which is already likely to be complicated enough.

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In an interview aired Wednesday, President Trump said that his overriding legislative priority is to pass health care reform, but he won’t wait indefinitely to turn his attention to overhauling the nation’s tax code. Trump told the Fox Business Network, “We’re going to have a phenomenal tax reform, but I have to do health care first. . . . I don’t want to put deadlines. Health care is going to happen at some point. Now, if it doesn’t happen fast enough, I’ll start the taxes.” The White House had hoped to pass a tax bill before the congressional recess in August, though officials have conceded the deadline is slipping. Trump suggested that it is important to pass the health care bill first, because it would provide “hundreds of millions of dollars” in savings that could be used to offset a net tax cut.

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The Congressional Budget Office’s (CBO) estimate of the American Health Care Act (AHCA) finds it will reduce deficits by $337 billion through 2026 (read our analysis here). But what would it mean for the long term?

While CBO hasn’t yet provided second decade estimates (other than to say the bill would not be deficit-increasing), we estimate – very roughly – that the bill would save $2 trillion over two decades, including $1.6 trillion between 2027 and 2036. Including interest, we estimate 20-year savings of $2.4 trillion. However, the bill also includes several “cliffs” that if addressed could significantly reduce that estimate.

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The furor over the Congressional Budget Office’s report on the House GOP health bill is concentrated on predictions about insurance coverage, which suits Democrats fine. Lost amid the panic is that CBO shows the bill is a far-reaching advance for the market principles and limited government that conservatives usually favor.

The CBO is not omniscient, but if its projections are even close to accurate then ObamaCare repeal and replacement is the most significant government reform in perhaps three decades. Under conventional (static-revenue) scoring, the bill cuts spending on net by $1.22 trillion and eliminates a raft of new taxes worth $883 billion through 2026.

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One of the most controversial provisions (for conservatives) of the American Health Care Act (aka Obamacare repeal and replace) is the creation of an advanceable, refundable tax credit for individuals to purchase health insurance. It would be available to anyone not offered health insurance at work, or eligible for Medicare or Medicaid. It would be bigger for older folks and smaller for younger folks. It would means test starting at $75,000 ($150,000 for married couples). The credit would be available month to month to offset health insurance premiums as a direct offset. It is paid for by repealing Obamacare.

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