Wealthy Americans stand to gain from Obamacare’s demise.
The rich will likely receive billions in tax cuts if the health-care law is overturned, according to a new analysis published Monday from the Center on Budget and Policy Priorities, a Washington think tank.
The nation’s top 0.001%, the 1,409 U.S. households with annual incomes over $53 million, would receive a combined $3.8 billion in tax cuts if the law is overturned, according to the report.
That’s because overturning Obamacare would eliminate several taxes that were imposed to help pay for the law’s expansion, including a 0.9% Medicare tax on single Americans who earn more than $200,000 a year or couples who make $250,000, the report said.
A ruling against the health law would also eliminate a 3.8% Medicare surtax on net investment income for high-income filers — $200,000 for single filers and $250,000 for joint filers.
Most of these tax cuts would go to households with incomes over $1 million, who would receive tax cuts averaging about $46,000 apiece, according to the report.
The pharmaceutical industry would also benefit. Obamacare collects an annual fee from pharmaceutical companies that sell branded prescription drugs.
While the nation’s wealthiest taxpayers and pharmaceutical companies would benefit, the middle-class and poor would be at a disadvantage. About 25 million Americans may be left uninsured if the law is struck down in its entirety, including those insured through Obamacare’s Medicaid expansion.
“In arguing the ACA should be struck down, the administration and the state attorneys general are in effect seeking to transfer billions of dollars of income from low- and moderate-income Americans to people on the top rungs of the income ladder,” said Aviva Aron-Dine, vice president for health policy at the Center on Budget and Policy Priorities and lead author of the report.
A federal appeals court in New Orleans is expected to issue a decision any day now on a lower court ruling that overturned Obamacare, formally known as the Affordable Care Act, in a case known as Texas vs. the United States.
Texas and other Republican-led states brought the suit, which was defended by Democratic-led states and the House of Representatives.
The suit alleged that Obamacare’s individual mandate was unlawful under the federal government’s taxing powers after Congress reduced the penalty for not having insurance to $0 in 2017. Texas argued that therefore the law must be scrapped.