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The House GOP Healthcare Bill Would Repeal $574.5 Billion in ACA Tax Increases

1 min readBy: Scott Greenberg

This morning, the Joint Committee on Taxation released revenue estimates for the new House Republican healthcare bill. The bill, released last night, would repeal 14 of the 21 revenue increases in the Affordable Care Act, in addition to delaying the Cadillac TaxThe Cadillac Tax is a 40 percent tax on employer-sponsored health care coverage that exceeds a certain value. The aim: to curb health-care cost growth, reduce favorable tax treatment of employer-provided insurance, and help fund the Affordable Care Act (ACA). It was repealed in late 2019 before taking effect. until 2025.

All in all, rolling back the taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. increases in the Affordable Care Act would reduce federal revenue by $574.5 billion over the period between 2017 and 2026:

Sources: Joint Committee on Taxation, JCX-16-17, JCX 12-17, JCX 10-17, JCX 8-17, JCX 6-17
Provision repealed (or delayed) Change in federal revenue, billions of dollars, 2017-2026
Net Investment Income Tax -$157.6
Health Insurance Providers Tax -$144.7
Additional Medicare Tax -$117.3
Cadillac Tax (delay) -$48.7
10% floor on deductibility of medical expenses -$34.9
Branded Prescription Drug Fee -$24.8
Medical Device Tax -$19.6
Limitations on FSAs in cafeteria plans -$18.6
Limitation on purchase of over-the-counter drugs with HSAs, Archer MSAs, and FSAs -$5.5
Limitation on the deductibility of business expenses related to Medicare Part D -$1.7
Tanning Tax -$0.6
Limitation on deductible compensation to health insurance executives -$0.4
Increase in penalty on improper HSA and Archer MSA distributions -$0.1
TOTAL -$574.5

These estimates do not reflect the total expected revenue effect of the House Republican healthcare bill, which will be influenced by a several other factors, including the bills changes to the premium tax creditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. and to Health Savings Accounts. The estimates also do not include the direct revenue effect of eliminating the individual mandate and the employer mandate.

For more details about the tax changes in the House Republican healthcare bill, click here.