Last week the House Republicans approved the American Health Care Act, called “TrumpCare” by some.
It is likely to have a significant local economic impact if it gets passed by the Senate and signed into law.
According to Data USA, a number-crunching website, healthcare/social assistance is the number one industry and source of jobs in Los Alamitos.
Over 800 jobs In Los Alamitos are in the healthcare/social assistance field, according to the latest available data from 2015. The next largest Los Alamitos industry is education, with over 600 jobs. Healthcare creates over 15 percent of the Los Alamitos job market.
For Cypress, healthcare/social assistance is tied for first place as the source of jobs. Approximately 3,000 employees in Cypress work in the healthcare field, 12.6 percent of the job market.
No one can easily predict how the House bill will fare in the Senate, nor whether any massive changes will ultimately be approved and signed into law.
One thing is for certain, the House Republican bill will significantly decrease the overall monies going into the healthcare field.
The severe reduction of money going into healthcare is a result of the combined impact of several different changes. Most of the current healthcare taxes, including even some Medicare taxes, are reduced or eliminated:
The individual mandate and its penalties (taxes) are eliminated, retroactively to the beginning of 2016.
The employer mandate and its penalties (taxes) are eliminated, also retroactive to the beginning of 2016.
The premium tax credit is first modified then repealed effective 2020.
The Net Investment Income Tax of 3.8 percent on the unearned income of wealthy individuals and estates is eliminated. This tax was part of President Obama’s Affordable Care Act and helped pay for healthcare insurance premium subsidies.
The small employer health insurance tax credit is eliminated effective 2020.
The “Cadillac” tax on high cost employer health plans is delayed until 2026.
The medical device excise tax is eliminated.
The 10 percent “tanning” tax is eliminated effective June 30, 2017. This tax also helped pay for subsidies. Because there is a direct correlation between excessive use of tanning salons and skin cancer, this tax was imposed as part of the Obama era healthcare bill.
The annual fees on health insurance providers and branded prescription drug manufacturers are eliminated.
In sum, the House Republican-passed bill eliminated all the federal sources of funds, which funded subsidies for individual and small business health insurance plans, as well as the funding for Medicaid extension to the working poor.
The House bill did not go through the normal Congressional Budget Office vetting and analysis for its impact on the U.S. Deficit and on health care consumers.
Thus, we don’t know yet the predicted specific impacts of its massive tax cuts and other provisions.
What is obvious is that much of the Republican bill’s cuts will go into the pockets of wealthy individuals, corporations and estates.
That money is not going to be spent on healthcare employment, whether locally or anywhere.
Joel Block is a retired attorney and freelance writer living in Rossmoor.
This column appeared in the May 10, 2017 print edition of the News Enterprise.
