ACA Lawsuit Would Cut Taxes for the Most Well-Off While Ending Health Coverage for Millions
End Notes
[1] Linda J. Blumberg et al., “State-by-State Estimates of the Coverage and Funding Consequences of Full Repeal of the ACA,” Urban Institute, March 26, 2019, https://www.urban.org/research/publication/state-state-estimates-coverage-and-funding-consequences-full-repeal-aca.
[2] Jonathan H. Adler and Abbe R. Gluck, “What the Lawless Obamacare Ruling Means,” New York Times, December 15, 2018, https://www.nytimes.com/2018/12/15/opinion/obamacare-ruling-unconstitutional-affordable-care-act.html; Ilya Somin, “Thoughts on the Trump Administration’s Decision Not to Defend Obamacare,” Reason, June 9, 2018, https://reason.com/2018/06/09/thoughts-on-the-trump-administrations-de.
[3] The ACA also included other revenue measures, such as a fee on insurance companies, a tax on high-cost health plans (the “Cadillac tax”), and limits on tax deductions for insurance company executives. These other provisions are mostly smaller and/or have been temporarily suspended by policymakers.
[4] These and other estimates for high-income households include only the two Medicare taxes; total tax cuts, taking into account other provisions of the ACA, would be slightly larger. Tax-cut estimates are based on Tax Policy Center (TPC) estimates of tax cuts from eliminating the Additional Medicare Tax in 2017 (TPC tables T16-0301 and T16-0302) and the Net Investment Income Tax in 2018 (TPC tables T18-0190 and T18-0191). To estimate tax cuts in 2019, we assume the value of the tax cuts would increase linearly through 2025 (for which estimates are available from TPC tables T16-0303, T16-0304, T16-0311, and T16-0312). While some of these estimates predated the 2017 tax law, that law did not directly alter the two Medicare taxes and does not appear to have significantly affected the taxes’ revenue or distributional effect. For example, TPC estimates of the distribution and total effect of the Net Investment Income Tax were similar both before and after the enactment of the 2017 tax law, as are Joint Committee on Taxation estimates of the revenue from that provision.
[5] These are the 37 states where the coverage expansions have the lowest cost. Estimates of how ACA repeal would affect federal spending and coverage in 2019 are from Blumberg et al.
[6] We distribute the Tax Policy Center’s estimate of the total tax cuts by state using data from Matthew Gardner and Meg Wiehe, “Affordable Care Act Repeal Includes a $31 Billion Tax Cut for a Handful of the Wealthiest Taxpayers: 50-State Breakdown,” Institute on Taxation and Economic Policy, March 17, 2017, https://itep.org/affordable-care-act-repeal-includes-a-31-billion-tax-cut-for-a-handful-of-the-wealthiest-taxpayers-5/.
[7] The Congressional Budget Office estimates that the federal cost of Medicaid expansion coverage is about $5,600 in 2019, on average. Congressional Budget Office, “Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2019 to 2029,” May 2, 2019, https://www.cbo.gov/publication/55085. Premium tax credit estimates are annualized figures from the Centers for Medicare & Medicaid Services, “Early 2019 Effectuated Enrollment Snapshot,” August 12, 2019, https://www.cms.gov/sites/default/files/2019-08/08-12-2019%20TABLE%20Early-2019-2018-Average-Effectuated-Enrollment.pdf.
[8] For the methodology behind the top 0.001 percent calculation, see Brandon DeBot, Chye-Ching Huang, and Chuck Marr, “ACA Repeal Would Lavish Medicare Tax Cuts on 400 Highest-Income Households: Each Would Get Average Tax Cut of About $7 Million a Year,” Center on Budget and Policy Priorities, January 12, 2017, https://www.cbpp.org/research/federal-tax/aca-repeal-would-lavish-medicare-tax-cuts-on-400-highest-income-households. These revised calculations focus on the top 1,409 households (the top 0.001 percent) because the IRS has stopped publishing data for the top 400 taxpayers.
[9] These estimates are for 2015, when the ACA only partially closed the donut hole, and thus underestimate savings in 2020 (when the hole will be fully closed). Centers for Medicare & Medicaid Services, “More than 10 Million People with Medicare Have Saved Over $20 Billion on Prescription Drugs Since 2010,” February 8, 2016, https://www.cms.gov/newsroom/press-releases/more-10-million-people-medicare-have-saved-over-20-billion-prescription-drugs-2010. See also Juliette Cubanski, Tricia Neuman, and Anthony Damico, “Closing the Medicare Part D Coverage Gap: Trends, Recent Changes, and What’s Ahead,” Kaiser Family Foundation, August 21, 2018, https://www.kff.org/medicare/issue-brief/closing-the-medicare-part-d-coverage-gap-trends-recent-changes-and-whats-ahead/.