1.  Eliminate Affordable Care Act subsidies for those earning between 300 and 400 percent of the federal poverty level. The Affordable Care Act (Obamacare) allows individuals and families to purchase private health insurance coverage through health insurance exchanges or "marketplaces." Those with certain income levels (roughly between 130 percent of the federal poverty level and 400 percent) are eligible for tax credits to cover portions of their premiums, and they can receive additional subsidies to reduce out-of-pocket cost sharing expenses. In 2018, the poverty level represented incomes of $12,140 for an individual, 16,460 for a couple, and $25,100 for a family of four. This option would cap the income level at which premium subsidies are available at 300 percent of the federal poverty That would eliminate eligibility for subsidies from individuals whose income was between $36,420-$48,560. Effect on deficit: -$109 billion.               
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3. Supporters Say

• Capping exchange subsidies like this would reduce the deficit without necessarily increasing the number of uninsured as long as employers offer insurance. Because good insurance plans can help attract and retain workers, employers will offer them better alternatives than the options available on the exchanges.

Opponents Say

• Losing a premium subsidy at 300 percent of the poverty level represents a substantial loss -- around $1,600 for an individual making just over $36,000 a year. This likely would reduce the incentive to work more for people with incomes near the threshold. It would lead many of them to reduce their reported taxable incomes in other ways as well.

Please consider the following proposal for changing taxes. In your group reply, please provide an analysis of this proposal. First explain what you consider to be the advantages and disadvantages of enacting this measure. What are some reasons why it would be a good idea to enact this? Are there any drawbacks or reasons why you would not want to enact this?

Answer rating: 100% (QA)

Advantages of Eliminating ACA Subsidies for Those Earning Between 300 and 400 Percent of the Federal Poverty Level Reduction in the Deficit Eliminatin... View the full answer