ACA repeal likely would boost CEO pay

The recent health insurance bills in the U.S. House and Senate are in a race to the bottom for heartlessness, deception and awful public policy. The bills share well-known faults: less coverage, higher premiums and co-pays, and big tax cuts for the wealthy made possible by Medicaid allocations that fail to meet costs.

The Congressional Budget Office predicts 634,500 Tennesseans will lose coverage under the Senate plan — 395,000 from Medicaid; 239,500 in the individual markets. Nationally, it’s 22 million people losing coverage.

One additional repugnant feature, however, has not gotten much attention, perhaps because the legislative jargon is buried on page 67 of the House bill, page 30 of the Senate version. Michael Hiltzik of the Los Angeles Times tracked the obscure references and discovered it is a tax break for our large health insurance companies “well in excess of $70 million a year.”

Our Congress would reintroduce a corporate tax loophole, one allowing tax deductions for executive pay, so long as that pay is disguised as stock options or other “performance pay,” something routinely done by compliant boards. The House would do so starting next year; the Senate makes it retroactive to this year.

The Affordable Care Act took the reasonable step of limiting that corporate loophole/deduction to half a million dollars per executive for health insurance companies. Sarah Anderson at the Institute for Policy Studies declared, “This set an important precedent for reducing taxpayer subsidies for CEO pay.”

Let’s remember the U.S. leads the world in exceedingly large CEO compensation. For example, Modern Healthcare tallied $171.8 million in 2016 CEO compensation at the eight largest U.S. health care insurers. The “realized compensation” would have been enough to cover the annual premiums for about 59,150 people using the most popular online plan.

The Institute for Policy Studies analysis of 2015 numbers is eye popping. The ACA deduction limits generated roughly $92 million in public revenue in 2015 regarding just 26 executives at Aetna, Anthem, Cigna, Humana and UnitedHealthcare. That’s enough money to cover ACA premium subsidies for 28,500 Americans. Numbers from Congress’ Joint Committee on Taxation also show the ACA limits on executive compensation deductions will add over a decade hundreds of millions of dollars in tax money that could help with health care costs.

Senate Majority Leader Mitch McConnell, his pockets filled with $3,667,264 in campaign contributions (2012 to 2016) from health care industries, is headed the wrong way by returning incentives to make CEO compensation even larger. Instead, let’s extend the ACA corporate bonuses deduction limit to all major U.S. corporations, a move estimated to return $50 billion dollars to our country’s treasury over the next decade, and provide resources to secure and to expand our health care.

Mark Harmon is a professor of journalism and electronic media at the University of Tennessee, and a member of the Tennessee Democratic Party Executive Committee.