Who gets tax credits under GOP health plan

The GOP Obamacare replacement plan would find lower-income people getting fewer tax credits to pay down insurance, and benefitting high-income customers, a preliminary analysis finds.

The nonpartisan Kaiser Family Foundation took a look at the projected annual tax credit available under Obamacare and another under the American Health Care Act, the replacement and repeal bill released late Monday.

The GOP replacement plan would change how tax credits are given out to pay down the cost of insurance. Obamacare gives out credits based on income, with low-income people getting more.

The American Health Care Act pegs credits towards age, with older people getting more money and younger Americans getting less.

Kaiser looked at the annual premiums given out for 2017 in Reno, Nevada, Mobile, Ala., and the national average.

The analysis found that people with lower incomes were set to receive less money under the GOP replacement plan.

For instance, the national average for someone who is 27 years old that makes $20,000 a year would get $3,225 a year in credits under Obamacare. Under the American Health Care Act, the same person would get $2,000.

A major change from Obamacare is that people who get $75,000 a year wouldn’t get any tax credits under the Obamacare plan. However, the same person might get a reduced tax credit under the GOP plan.

The GOP plan provides tax credits via certain age brackets. People in their twenties get $2,000; thirties get $2,500; forties $3,000; and fifties $3,500.

People who are 60 years and up get $4,000 a year.

Earlier drafts of the GOP plan didn’t have a cap on income, but the final version includes a cap starting after $75,000 for a person and around $100,000 for a couple.

So someone who earns $75,000 who is 40 years old would stand to get $3,000 if they live in Mobile, Ala., but nothing under Obamacare’s income-related tax credits.

In addition, a 27-year-old who makes $40,000 a year would get $103 in credits under Obamacare but would get $2,000 under the GOP plan.

Republicans have favored age-based credits because they would go to people who use healthcare the most.

However, tax credits have been a focal point of an intraparty scuffle with conservatives who favor a tax deduction that lowers the tax liability for people seeking insurance on the individual market, which is for people that don’t get insurance through their job.

Conservatives generally oppose tax credits because they can go to people who do not pay taxes, unlike tax deductions.

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