- Caitlin Owens
- Mar 14
Thune proposal would means-test tax credits in House bill
AP file photo
Sen. John Thune, the third-highest ranking member of the Senate, is working on a proposal to partially means test the tax credits in the House Obamacare repeal and replacement bill.
In a sit-down with Axios, Thune said he wants to avoid "creating a new middle class entitlement," which the current House bill could do by spreading the federal assistance too far up the income scale. Instead, his proposal would give more assistance to low-income people and cap the assistance at a lower income level than it currently is. "It would be a more progressive-type benefit," he said.
Why it matters: Some conservative health care analysts believe the GOP would cover more people if the tax credits did more to help low-income people, since every dollar of financial aid matters more to them. Read on for the details.
What the proposal would do:
- Begin phasing out the tax credit at 400 percent of the federal poverty level, or for individuals making $48,240 a year. It would be fully phased out at 621 percent of the poverty level, or $74,907 for an individual. The current House bill begins phasing out the tax credit at $75,000 for an individual and fully phases out at individuals making $115,000 a year.
- The tax credit would phase down $150 for every $1,000 earned between 400 and 621 percent of poverty.
- People making less than 250 percent of poverty would receive a tax credit that is both income and age-based, as opposed to the House's age-based only tax credit.
- People making between 250 and 400 percent of poverty would receive the age-based tax credit in the House bill.