Democrats shun $400 million insurance CEO tax break in heated Ways and Means session
American Health Care Act provision would raise the cap on the annual corporate income tax deduction for CEO and other top executives.
The House Ways and Means Health Subcommittee on Wednesday held a combative markup debate on what Democrats called a $400 million corporate tax break to insurance CEOs and other top executives.
The provision under the new American Health Care Act raises the cap on the annual corporate income tax deduction for CEO and other top executive health insurance compensation, from $500,000 to $1 million.
The estimated loss of revenue over the next 10 years under the new provision is $400 million, according to Thomas Barthold, Joint Committee on Taxation chief of staff.
The net cost of the repeal of the income tax cap is $157.6 billion from 2018 to 2026, Barthold said.
[Also: Insurers both winners and losers in GOP bill]
Republicans released the new healthcare plan to replace the Affordable Care Act earlier this week. Committee members considered a portion of the bill regarding remuneration from certain insurers.
Ranking member Richard Neal of Massachusetts said the debate on healthcare legislation has begun by giving a tax break to health insurers.
Rep. Lloyd Doggett of Texas asked for a postponement of a vote until March 16 to give the Congressional Budget Office time to score the cost of the plan.
The CBO is expected to release its figures next week.
"This particular plan we're considering has never had a single public hearing anywhere," Doggett said. "We don't know the cost, we don't know who it covers."
A motion to table Doggett's request passed in a 23-16 vote along party lines.
[Also: Hospital groups come out against Republican healthcare bill, blast Medicaid plans]
Doggett also wanted included in the healthcare law a provision to have a copy of President Trump's tax returns. "It could reveal Russian entanglements …" Doggett said.
His motion was ruled not germane to the issue being debated.
Under the Affordable Care Act, insurance companies are allowed to deduct $500,000 of executive compensation. The provision would raise the cap to $1 million for the CEO and the next three highest paid insurance executives, to bring the cap in line with that of executive pay in other industries.
"It would conform treatment of health insurance providers to all other businesses," said Barthold.
The Obamacare provision reportedly helped pay for a portion of the healthcare law, an estimated $600 million through 2019.
[Also: Andy Slavitt: GOP healthcare bill built on 'faulty' math]
"This measure done under the guise of repealing Obamacare, gives a $400 million windfall to the insurance industry," Doggett said.
Rep. Brian Higgins pointed out that CEO compensation for the major insurers, UnitedHealthcare, Cigna, Aetna and Anthem, ranges from $13 million to $66 million.
"I don't think the provision is justifiable and it's morally reprehensible," Higgins said.
Rep. Ron Kind of Wisconsin speculated that the $500,000 cap was put on at the time of the ACA to make sure reforms didn't benefit insurance companies.
Twitter: @SusanJMorse
