As the debate continues to swirl over the American Health Care Act, some say there are two overlapping groups that would come out on top if the bill becomes law: health insurance executives and other wealthy Americans.
For one, the AHCA would repeal the little-known provision of the Affordable Care Act that prevents health insurance executives from taking federal tax deductions for executive compensation greater than $500,000, bumping the cap to $1 million instead.
That cap was intended to ensure that government funds are separate from money that goes toward executive compensation, John Trentacoste, a managing director at consulting firm Farient Advisors, told Bloomberg.
Josh Bivens, the director of research at the Economic Policy Institute, added in a recent post that the GOP healthcare bill’s executive pay provisions “clearly provide an incentive for firms to pay CEOs more.”
That's for a couple reasons: Not only can companies can deduct up to $1 million in cash pay, they can also deduct unlimited amounts of “performance-based” pay, he wrote.
Some Democrats have already cried foul over the provisions, including Rep. Lloyd Doggett, D-Texas, and Rep. Brian Higgins, D-N.Y., who called it both “unjustifiable” and “morally reprehensible,” CNBC reported.
Health insurance companies, meanwhile, also stand to gain from the AHCAA’s repeal of the health insurance tax—which had already been delayed for a year.
Indeed, one major insurer, Anthem, has already expressed approval for the provision that repeals the tax. The company’s executives told Barclays analysts at a conference Wednesday that most of savings from that suspended tax will go toward reducing the cost of healthcare for its members, with a smaller share going toward increasing its earnings per share.
On a broader scale, House Republicans’ healthcare bill would benefit the wealthiest U.S. households at more than five times the rate that it would for middle-income households, according to a study from the Tax Policy Center.
"The effects are really very dramatic. We found that a typical middle-income family would get a tax cut averaging about $300, while people in the top 0.1% would get a tax cut of about $207,000," Howard Gleckman, a senior fellow at the Tax Policy Center, told Reuters. The top 0.1% of U.S. families have income of at least $3.9 million, the article noted.