The Center for a Free Economy believes in a health care system which is focused on the empowered patient and her doctor. Neither the government nor big business forces in the healthcare system should not get between patients and providers. Families need the means to take control of their own health care decisions. It’s also important to remember that health care policy these days is tax policy, and vice-versa.
Recent News about Healthcare Policy:
By Ryan Ellis The Senate Finance Committee announced today that it would add to the Senate tax reform bill a zeroing out of Obamacare's individual mandate surtax, in essence repealing the mandate. This is a big tax cut aimed squarely at America's middle class. The mandate is a tax which punishes those who can least afford it Obamacare's individual mandate is enforced by the collection of a surtax on income. Failure to purchase Obamacare insurance triggers the surtax. In 2017, the surtax is equal to the greater of: 2.5 percent of adjusted gross income, or the dollar penalty The dollar penalty is $695 for every adult in the household, plus $347.50 for every child in the household, with a household maximum of $2085. Do the math, and that means that for any family making more than $83,400 the mandate tax is a flat 2.5 percent of income. For a single [...]
By Ryan Ellis Senate Republicans today released version 2.0 of their Obamacare "repeal and replace" bill, the Better Care Reconciliation Act (BCRA). This version of BCRA is a major lurch to the Left from the original BCRA and conservatives supporting this process have some things to think about. A Tax Hike on Small Businesses and Savers The major departure from the original BCRA is that v2.0 fails to repeal the 3.8 percentage point Obamacare surtax on capital gains, dividends, and other savings (the "net investment income tax," or NIIT). It also fails to repeal the 3.8 percentage point tax bracket for the self-employment tax and the payroll tax ostensibly earmarked for Medicare. In failing to do so, v2.0 of BCRA raises taxes by over $230 billion over a decade relative to v1.0 of BCRA. It's worth noting that this is the first Obamacare repeal bill (that tries to advertise itself [...]
By Ryan Ellis There has been a lot of loose talk recently both in the conservative healthcare policy community and in the GOP Senate cloakroom about delaying or stopping repeal of the "net investment income tax" (NIIT), a 3.8 percentage point increase in the capital gains and dividends tax. That loose talk should end. According to the Tax Foundation, ending the NIIT would create 133,000 jobs. It will increase GDP by 0.7 percent. This in turn raises after-tax income by 0.6 or 0.7 percent for the lower four quintiles--i.e., the non-rich. A family of four making $80,000 per year would see a raise of $480. A single person making $35,000 per year would see a raise of $210. Republicans didn't just dream up a plan to cut the capital gains rate as part of Obamacare repeal. I agree with those who say that a healthcare bill is no place to have [...]
By Ryan Ellis The Congressional Budget Office (CBO) today released their score of the "Better Care Reconciliation Act of 2017" (BCRA). There's the usual nonsense about how millions of people will lose coverage (which only makes sense if you think the individual mandate is a good idea or that using an outdated Medicaid coverage baseline is sound actuarial science), all of which can be safely ignored as #fakenews. The tax side is pretty straightforward, however. It's a tax cut of $700 billion, achieved by repealing all the tax hikes in Obamacare and expanding health savings accounts (HSAs). Three quick thoughts: BCRA provides an immediate, pro-growth, pro-jobs shot in the arm to the economy. By far the most under-reported upside to this bill is the immediate (indeed, retroactive) capital gains and dividends tax cut. By repealing the "net investment income tax" (NIIT) of 3.8 percentage points, BCRA results in a right-now [...]
By Ryan Ellis This week, the Senate GOP is reportedly putting pen to paper on their version of "repeal and replace" of Obamacare. One of the key design decisions they have to make is how to structure the individual health insurance refundable tax credit. As Avik Roy has pointed out, it's essential that the Senate get this right. No one is quite happy with the way the House (i.e., AHCA) version of this tax credit ended up. It's a flat dollar credit variable by age, which creates difficulties for very sick individuals and creates a "poverty trap" for those emerging from Medicaid and needing help in the individual market. Again, Roy documents all of this very expertly and he's right about his criticisms. The solution, everyone seems to say (and taking the lead of Senator John Thune of South Dakota), is to switch the credit from flat-dollar (within an age band) to means [...]
By Ryan Ellis Where's Jack Kemp when you need him? Heck, for that matter where is Bill Roth or Phil Gramm? The biggest tax cut the U.S. House of Representatives is likely to pass this calendar year is, ironically, the American Health Care Act (i.e., AHCA or Obamacare repeal). According to the Congressional Budget Office, it's a ten year tax cut of $1 trillion. Eventually, all twenty or so new or higher taxes in Obamacare are repealed by the bill--most of them retroactive to the beginning of this year. These include: Zeroing out the taxes associated with the individual and employer mandates Eliminating the "net investment income tax" (NIIT) that effectively increases the capital gains and dividends rate by nearly four points Striking out a hike in the Medicare payroll tax, but more on this below Doing away with a host of tax increases on health savings accounts and flexible spending [...]