Senate Health Bill Slashes Medicaid to Cut Millionaires’ Taxes

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Senate Health Bill Slashes Medicaid to Cut Millionaires’ Taxes

While those who are most vulnerable lose health coverage, the wealthy and corporations reap huge tax savings

'Senators face a fundamental choice,' writes Clement. 'Will they back a plan that imperils the health care of millions of hard-working Americans to give hundreds of billions of dollars in tax cuts to the wealthy and corporations?' (Photo: OverpassLightBrigade/flickr/cc)

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Despite slight differences, the health-care legislation under consideration in the Senate retains the same sickening goal of its House counterpart: cutting taxes for millionaires, billionaires and big corporations at the expense of working families. These bills are not about ensuring the health of working families, they are designed to increase the wealth of the lucky few. 

 

Twenty-two million people would lose health coverage under the Senate plan, according to the nonpartisan Congressional Budget Office. The savings would pay for tax cuts of $570 billion, mostly for high-income individuals and big health care companies. Both the Senate and House bills are meant to replace the Affordable Care Act (ACA, or Obamacare), which extended health coverage to 20 million previously uninsured Americans.

"These bills are not about ensuring the health of working families, they are designed to increase the wealth of the lucky few."

 

 

The Senate bill slashes Medicaid by $772 billion over 10 years. In 2026, 15 million fewer Americans would be covered—mostly people with disabilities, kids from working families, and the elderly poor.

 

 

Medicaid is central to America’s health care system. It pays for half the nation’s births and nearly two-thirds of all nursing home care.

 

 

The Senate plan also punishes patients by reducing subsidies to help them buy private insurance. For example, the average monthly premium for a 64-old making $56,800 a year will go up by up to $13,700 compared to what they will pay under the Affordable Care Act. Such price hikes will put health-care coverage out of reach for 7 million. Especially hard hit will be older Americans living in rural areas.

 

 

While those who are most vulnerable lose health coverage, the wealthy and corporations reap huge tax savings. Millionaires would get a tax break averaging $50,000 a year. Each of the 400 richest families in America would receive an average annual tax cut of $7 million.

 

 

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Health care corporations share in the tax-cut spoils too. Insurers will get $145 billion over 10 years—as well as a change in tax rules to let them overpay their top executives at taxpayer expense. Prescription drug companies will get $26 billion in tax cuts over the next decade.

 

 

Health insurers and pharmaceutical firms don’t need tax cuts. Profits of the eight biggest health insurance companies jumped by a third over a recent four-year span, to more than $25 billion.  Last year the top ten drug companies had combined earnings of over $83 billion.

 

 

Drug company profits keep getting bigger because drug companies keep price gouging. Over the past 10 years, drug prices have grown eight times faster than the general rate of inflation. Drug companies also stash hundreds of billions of dollars in profits offshore to dodge U.S. taxes.

 

 

Rich people never have to worry about losing their health care. They also benefit from a tax code that favors wealth over work: investment income in the form of dividends and capital gains is taxed at a lower rate than a lot of wage and salary income. The ACA addresses some of that injustice by placing a small tax on investment income for people making over $250,000 a year, using the revenue to expand health-care coverage to millions of lower-income Americans.

 

 

The Senate bill would reverse this advance, handing the wealthy a tax cut of over $170 billion over 10 years while undermining health care for working families.  The Senate plan would also weaken Medicare by repealing an extra payroll tax on employees making over a quarter million dollars a year. This surtax has strengthened the Medicare hospital fund—eliminating it will shorten by two years its ability to pay full benefits. But the wealthy will get a $59 billion tax cut.   

 

 

Senators face a fundamental choice. Will they back a plan that imperils the health care of millions of hard-working Americans to give hundreds of billions of dollars in tax cuts to the wealthy and corporations? Or will they reject this assault not only on our nation’s health care but on its core values of fairness, compassion and common sense?

Frank Clemente

Frank Clemente is executive director for Americans for Tax Fairness.

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