Neera Tanden and Obamacare’s $1 Trillion Tax Cut for Insurers
Speaking on Face the Nation yesterday, Center for American Progress CEO Neera Tanden claimed that Obamacare “is a massive tax cut for – in health care. It’s a six-hundred-billion-dollar tax cut for health care. It’s a tax cut to middle-class families.” Tanden’s claims to the contrary, the law and record are very clear about the fact that this massive new entitlement will go straight into the pockets of the insurance industry:
- Section 1412(c)(2)(A) of the law provides that “The Secretary of the Treasury shall make the advance payment under this section of any premium tax credit allowed under section 36B of the Internal Revenue Code of 1986 to the issuer of a qualified health plan on a monthly basis.”
- Page 37 of the report on the Finance Committee bill states: “The Committee Bill provides a refundable tax credit for eligible individuals and families who purchase health insurance through the state exchanges. The premium tax credit, which is refundable and payable in advance directly to the insurer, subsidizes the purchase of certain health insurance plans through the state exchanges.”
Even liberal professor Jonathan Gruber – a paid Obamacare consultant – admitted in an interview that “Most households will never actually get their hands on the credits, so their existing tax liabilities won’t actually change. In most cases, credits will go straight to insurance companies, to pay for health benefits.” And according to CBO’s updated estimates, Obamacare will now provide over $1 trillion in spending on subsidies, which will go directly into the pockets of insurance companies.
Of course, candidate Obama opposed sending subsidies straight to insurance companies when he ran for President. An Obama campaign ad derided Senator McCain’s proposal to subsidize insurance through tax credits: “That tax credit? McCain’s own Web site said it goes straight to the insurance companies, not to you, leaving you on your own…” Likewise, in a campaign speech, candidate Obama vilified Senator McCain for this policy: “But the new tax credit [McCain’s] proposing? That wouldn’t go to you. It would go directly to your insurance company – not your bank account.”
In making her false claims that middle class families – as opposed to insurance companies – would actually receive these tax cuts, Tanden contradicted both the words of candidate Obama – on whose 2008 campaign she worked – and someone who has written multiple papers for the organization she leads. It’s unfortunate that Obamacare supporters feel the need to twist the facts in such a blatantly obvious manner to try to gin up support for their unpopular health care law.