Sarah Kliff at Vox explains Today in Obamacare: the GOP’s latest plan gives the wealthy extra help to buy insurance.
Both Obamacare and the Republican replacement plans provide tax credits to help make insurance more affordable. But while Obamacare’s credits are based on income, meaning poorer people get more help, the Republican plan would base them on age. The result would be regressive: Wealthy people would get more help buying insurance, while poor people would likely get less assistance.
The Obamacare tax credits are income-adjusted, which means that people who earn less get more help. Under Obamacare, people who earn less than 200 percent of the poverty line (about $24,120 for an individual or $49,200 for a family of four) get the most generous help. They would get enough money so that a midlevel plan would cost no more than 6.4 percent of their income. People who earn more than 400 percent of the poverty line ($48,240 for an individual or $98,400 for a family of four) get nothing at all. There is no cap on what they have to pay for insurance.
The Republican plan is very different. It includes age-adjusted tax credits. Older people get more help, and younger people get less help. The idea is that older people need more support because they get charged higher premiums. But income does not matter at all. Under the Republican plan, it wouldn’t matter if a 30-year-old earned $15,000 or $150,000 — he would get the exact same tax credit.