MYTH: The Better Care Reconciliation Act (BCRA) is a tax cut for the rich veiled as health care reform.
FACT: Obamacare's numerous tax hikes made health care costlier and directly hit middle class families. The BCRA repeals or suspends all of these tax hikes.
It's Middle Class Families Who Benefit Most From Tax Relief in BCRA
Individual mandate ($35 billion): If an individual or family refuses - or cannot afford - to purchase one of the few government-approved health insurance plans available, Obamacare's individual mandate taxes them. Of the nearly 245,000 Pennsylvanians who paid the individual mandate penalty, 86% made less than $50,000.
Chronic care tax ($36 billion): Before Obamacare, Americans battling catastrophic medical conditions could deduct a portion of their expenses from their taxes. Obamacare made the deduction less valuable, thus increasing taxes on those battling chronic diseases. This tax impacts at least ten million American households annually. More than 70 percent of those hit reported income of $75,000 or less. Almost half of those hit reported incomes under $50,000.
Medical device tax ($20 billion): Obamacare imposed a 2.3 percent excise tax on medical devices such as pacemakers and artificial joints. While the tax is applied to manufacturers and importers of these devices, ultimately the burden falls on patients. According to the nonpartisan Congressional Research Service, "most of the tax will fall on consumer prices."
Health insurance tax ($144 billion): Obamacare imposed a new tax on health insurance premiums. While the tax is levied on insurers, like most taxes, the burden falls on consumers. The nonpartisan Joint Committee on Taxation estimated in 2011 that the health insurance tax would increase annual premiums by 2.0 to 2.5 percent. For a family paying a $1,500 monthly premium, Obamacare's health insurance tax costs them an additional $360-$450 per year.
Prescription drug tax ($26 billion): This is another Obamacare tax that gets passed on to middle class consumers in the form of higher prices.
Medicine cabinet tax ($6 billion): Before Obamacare, tens of millions of Americans used pre-tax dollars in their HSAs and FSAs to purchase over-the-counter (OTC) drugs like cold and pain medicine. But Obamacare brought an end to this. This $5.6 billion tax hike forces tens of millions of Americans with Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) to use post-tax dollars to purchase OTC drugs.
Flexible Savings Accounts ($19 billion): Obamacare added a $2,500 annual contribution limit on Flexible Savings Accounts, which employers use to help their employees pay out-of-pocket medical expenses with pre-tax dollars.
Health Savings Accounts ($19 billion): In 2014, over half of households taking an HSA deduction reported an income of $100,000 or less. Thus, $19.2 billion of tax relief due to expanding HSA usage significantly benefits middle class households.
Medicare tax ($59 billion): Obamacare created a new 0.9 percent payroll surtax, but it wasn't indexed for inflation. Therefore, the Medicare trustees predict nearly eight in ten workers will be subject to this tax within the window of their analysis.