The Obamacare Provision You May Have Missed…

…I certainly had.

Yesterday Republicans finally revealed the first outline of Trumpcare.   It’s basically a plan a party obliged to promote policies whose first governing priority is to reduce the tax burden above almost all other concerns.

But in reviewing the stories this morning one sentence in this New York Times story surprised me.  Not that the Republicans plan to repeal it, but that it was a part of the Affordable Care Act (Obamacare) in the first place.

“The bill even does away with a provision meant to tax incomes of insurance executives that top $500,000.”

Sure enough, this was a thing.  And it wasn’t that the individual executive had to pay an increased tax, the company no longer had a tax deduction for executive pay.

Let that sink in for a moment, companies have a tax loophole that allow for executive salaries to be tax-deductible.  Then let this sink in.   In a massive health care reform purportedly meant to fix a broken healthcare system imposed by Democrats, the swamp-draining Republicans made sure to cut this unknown, yet effective, provision that does work to limit executive pay excesses.

Here is an excerpt from an article from from 2014 called “Finally Revealed:  Obamacare’s Hidden Gem”. (emphasis mine)

But the new “Executive Excess 2014,” despite numbers like these, will likely leave readers feeling more invigorated than infuriated. We now have, the new study makes clear, a concrete reason to feel hopeful about reining in executive excess. And that new reason for hope sits in the unlikeliest of places: Obamacare, the controversial Affordable Care Act enacted back in 2010.

What does Obamacare have to do with executive pay? A virtually unknown provision in the legislation ends — for health insurers — the free ride on executive compensation the federal tax code hands corporate America.

Until last year, all U.S. corporations could deduct off their corporate income taxes almost everything they pay their top execs. The new Obamacare tax provision ends this subsidy in the health insurance industry. Health insurers now only get to deduct off their taxes the first $500,000 they pay each executive.

What does losing this deduction mean in real corporate life? The 2014 edition of “Executive Excess,” “The Obamacare Prescription for Bloated CEO Pay,” has probed the pay records of the nation’s 10 largest health insurers for an answer.

These 10 insurers lost $207 million in deductions, thanks to Obamacare, on the compensation that went to their 57 top-paid executives. The loss of these deductions upped their tax bill by $72 million.

But that $72 million, notes “Executive Excess” lead author Sarah Anderson, only hints at the revenue the Obamacare executive pay provision will raise over coming years. Many more than 57 executives in the health insurance industry overall made more than $500,000 last year. Obamacare will likely raise the industry’s total tax bill over $50 billion over the next 10 years.

Lookit, this is not the most important provision of Obamacare, it’s simply one of hundreds of provisions meant to govern from the philosophy that this country is for all of us, not a handful of individuals and companies that are uniquely set-up to influence both the private and public sectors.  For all the shock and awe of the Trump era, it will be the details of a Republican-controlled federal government that will set out country on yet another disastrous boom-bust cycle.

Ugh.  Stay aware and active.  No one said helping the United States grow up would be easy.


The Parts of Obamacare Republicans Will Keep, Change or Discard (Haeyown Park and Margot Sanger-Katz | New York Times Online | March 6th 2017)

G.O.P. Repeal Bill Would Cut Funding for Poor and Taxes on Rich (Margot Sanger-Katz | New York Times Online | March 6th 2017)

Finally Revealed:  Obamacare’s Hidden Gem  (Sam Pizzigati | | September 4th, 2014)


One thought on “The Obamacare Provision You May Have Missed…

  1. Henchman Of Justice says:

    A board functions as a business owner.

    Business owners are not allowed to tax exempt their income and/or use as a basis for a tax deduction for business.

    Trump’s version of the ACA is a failure for repubes, but ftmp, a boon for the DNC……… is merely the ACA after stripping out minor tidbits and language……not repeal and replace like the Bullshitter ‘N Chief propagandized to his cheery crowds of supporters………exactly why not to vote 2 Party System as it is a LIE of epic magnitude.

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