Tax plan favors richest

Tax plan favors richest

The $1.5 trillion House tax plan released Thursday prioritizes tax cuts for the wealthiest households and profitable corporations and would dramatically increase the deficit.

Number of the Day

13 million - Number of families who make under $100,000 per year who would face a tax increase under the House tax plan. (Source: The New York Times)

The $1.5 trillion House tax plan released Thursday prioritizes tax cuts for the wealthiest households and profitable corporations and would dramatically increase the deficit. That, in turn, would likely force future budget cuts to programs like Medicaid, Medicare, and investments that build our economy and help support low- and moderate-income families. Low-income families would see few, if any tax cuts—even as they are likely to bear the brunt of subsequent budget cuts. The AP’s Josh Boak has more:

What is clear is that many of the benefits for the middle class could dwindle over time, even while companies and wealthy individuals could enjoy lasting tax advantages …The tax plan’s primary beneficiaries would be wealthier Americans, who would enjoy lower tax rates despite the elimination of some breaks, a repeal of the so-called alternative minimum tax and the termination of the estate tax.“With the details they’ve presented to us so far, it looks like the tax cut benefits the wealthy and major corporations,” said Martin Sullivan, chief economist at Tax Analysts and a former staff economist at the Treasury Department. “In fact, if you have a large family, given the facts that we have now, that you would pay more in taxes.”

Click here to read the LBP’s statement on the proposal.

 

Lawmakers consider Medicaid contract extensions

Lawmakers will try for the second time to extend the contracts for private companies that coordinate health services for 90 percent of Medicaid recipients in the state. The $15.4 billion contract would affect about 1.5 million people who receive health insurance through Medicaid. The AP’s Melinda Deslatte reports:

Two weeks ago, lawmakers sought more information about the performance metrics used, the decision-making involved in extending the contracts and the method for estimating costs. Raising more questions, the Legislative Auditor’s Office released a report after the extension vote was delayed that said the health department doesn’t properly monitor the managed-care companies to ensure they provide enough specialists to treat Medicaid patients’ mental health and substance abuse problems. Health Secretary Rebekah Gee said the contract extensions include more accountability and link more payments to health quality metrics. She said her department will do a more wide-ranging system redesign as it rebids the work.

 

House CHIP bill could result in coverage losses

The U.S. House of Representatives voted to extend funding for the Children’s Health Insurance Program today, but paid for the program through policies that threaten health coverage for others. Specifically, the House plan would shorten the grace period (currently 3 months) for people who are working to catch up on overdue premium payments in the individual health care marketplace. Tara Straw, a senior policy analyst at the Center on Budget and Policy Priorities, explains that this could cause as many as 688,000 people to lose their health insurance.

Enrollees often do catch up on missed payments. That’s been the experience in Washington State’s marketplace, the only one known to track and publicly report this information. More than half of Washington’s enrollees who receive APTC (Advance Premium Tax Credits) enter a grace period at some point — probably because most marketplace enrollees have income below 250 percent of the poverty line and many of them barely make ends meet. But while most who enter a grace period make a premium payment, in an average of about three weeks, a significant number of them don’t pay until the second or third month. Under the legislation, these people would have their policies cancelled and become uninsured.

 

Unintended consequences of sabotage

President Donald Trump’s efforts to undermine the ACA have been well documented. The LBP’s Jeanie Donovan explained how the administration’s sabotage led to premium increases in Louisiana and reduced funding for outreach and enrollment. However, the AP’s Ricardo Alonso-Zaldivar explains that the president’s decision to end cost-sharing reduction payments to insurers is having unintended positive consequences as some low and middle-income people may be able to find a plan with no monthly premium after accounting for subsidies.

The free insurance quirk is the result of President Donald Trump’s decision to end payments that reimbursed insurers for providing lower copays and deductibles to low-income customers. To offset losses, the companies raised premiums for popular “silver” plans, which automatically boosted federal subsidies. But premiums didn’t go up as much for basic “bronze” plans and higher-tier “gold” plans, so more customers can now get those plans for no added cost, provided their incomes qualify for subsidies. People making up to four times the poverty line, or about $48,000 for an individual, can get federal help.

 

Number of the Day

13 million – Number of families who make under $100,000 per year who would face a tax increase under the House tax plan. (Source: The New York Times)