Proposal to Repeal and Replace Obama Care
House Republican introduced proposal to repeal and replace the Patient Protect and Affordable Care Act (commonly known as “Obama Care”) Monday evening and the proposal is scheduled to be routed to the House Ways and Means Committee for mark up. Some of the significant changes included in the proposal is summarized below:
- Removal of penalties under IRC section 5000A for failure to have health insurance effective December 31, 2015.
- Removal of penalties under IRC section 4980H for failure to provide minimum essential coverage to employees by large employers effective December 31, 2015.
- Removal of current premium tax credit and introduction of a new Age-Based health insurance coverage credit. The credit amount ranges from $2,000 to $4,000 per year and per person (with a limitation of $14,000 for a household with five or more members). The credit would be subject to phase-out provision for taxpayers with modified adjusted gross income over $75,000 ($150,000 for married filing joint returns).
- Removal of the 3.8% net investment income tax and the 0.9% Medicaid surtax effective December 31, 2017.
- Removal of the section 162(m)(6) $500,000 compensation deduction limitation for health insurance providers.
- Removal of the medical device excise tax effective December 31, 2017.
- Revert from 10% to 7.5% income threshold for itemized deduction for medical expenses.
As the Republicans control both houses of Congress, many of the provisions included in the proposal is expected to be enacted.
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