Corporate Boons in Republican Health Care Bill Draw Fire

WASHINGTON (CN) – House Democrats took aim Wednesday at a provision of the plan by Republicans to replace the federal health care law, saying Trumpcare will sweeten the pot for insurance companies at a cost to the federal government of $400 million over 10 years.

Rep. Richard Neal, D-Mass., called the proposal “a tax bill,” and Rep. Lloyd Doggett, D-Texas, called it “morally reprehensible.”

The new bill would remove a $500,000 cap on tax deductions that insurance companies can take for individual executive pay. In the year after it took effect in 2013 under the Patient Protection and Affordable Care Act, the cap shrank the share of executive pay insurance companies could claim by 69 percent, increasing their combined tax bill by some $72 million, according to a report by the Institute for Policy Studies.

Under a tiny provision buried on page 67 of the GOP proposal, however, that cap will give way to an IRS code governing the rest of corporate America, which allows companies to deduct $1 million in compensation per executive as business expenses.

Thomas Barthold, chief of staff for the Joint Committee on Taxation, testified Wednesday before the House Ways and Means Committee that the $1 million limit would not apply to so-called “performance pay,” which often exceeds the salaries of insurance executives.

That revelation prompted Doggett to propose a hypothetical to Barthold: Could an insurance company deduct the full amount of a CEO who makes $100 million?

“It would be possible,” Barthold responded.

“Once this bill passes, American taxpayers will be asked to subsidize – if it’s in performance pay and meets the other provisions of the statute – $17.3 million for Aetna, $14.5 million for United Health, $13.6 million for Anthem, and so on,” Doggett said, citing recent CEO pay for insurance executives.

That six-line provision represents only a tiny portion, however, of the estimated $600 billion in revenue the government would lose – mostly in the form of repealed Obamacare-related taxes – if the bill becomes law.

Rep. Mike Thompson, D-Calif., suggested the bill could cut up to 3 million jobs.

“Not only do people lose their health care, and insurance executives get millions and millions and millions of dollars, but Americans are going to lose their jobs to feather the nest of these millionaires in this kind of backdoor way to compensate them,” Thompson said.

Details about the new bill are so far sparse.

Barthold could not provide specific analytics, and appeared before the committee Wednesday morning without a Congressional Budget Office score for the bill, leaving lawmakers stumbling in the dark about how many people the new bill will cover, how many people might lose health coverage and how much the bill will cost.

That led Doggett to try to delay Wednesday’s markup of the bill for a week so the committee could call expert witnesses to testify.

Noting that Congress held 79 public hearings and summoned 181 witnesses while legislating the Affordable Care Act, Doggett said more time is necessary to study the details of the bill and understand its impact.

“What this bill needs is some extreme vetting,” he said. “Frankly any vetting at all would be an improvement because it has not been vetted in any public forum,” he added.

A similar process played out in the House Energy and Commerce Committee, which also began consideration of parts of the bill Wednesday, including the rollback of Obamacare’s Medicaid expansion and a provision meant to replace the individual mandate that allows insurance companies to hit people who do not maintain continuous coverage with a 30 percent surcharge on their policies.

But that committee markup was almost immediately bogged down in debates about the process Republicans are using to advance their long-promised health care replacement.

Rep. Anna Eschoo, D-Calif., said the Republicans were using a “lousy process” to push through a piece of legislation without the typical hearings or debates.

After Republicans shot down a motion from Ranking Member Rep. Frank Pallone, D-N.J., that would have delayed the markup of the bill for 30 days, Rep. Ben Lujan, D-N.M., forced the committee clerk to read the entire 66-page bill out loud.

Normally committees waive the reading of bills they are considering without issue, but Lujan’s objection meant that could not happen and ensured a nearly hour-long reading of the tangled legal framework of the GOP health care plan.

Pallone promised Democrats would offer more than 100 amendments to the bill once given the opportunity, which Committee Chairman Greg Walden noted could keep the committee working through the weekend.

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