Few will pay more under health care law

WASHINGTON -- The Supreme Court says President Obama's health care law is constitutional because it's a tax — but only a small percentage of Americans will pay more, a USA TODAY analysis of federal data shows.

Though the law is projected to raise at least $675 billion in revenue over the coming decade, nearly half comes from about 3.5 million taxpayers with adjusted gross incomes above $200,000. Employers, insurers and health care providers are slated to fork over much of the rest.

That leaves only a few taxes that will fall partially on middle-income taxpayers:

•About 7 million people could pay more because the law makes it more difficult to deduct medical expenses. People with lower incomes are less likely to itemize deductions.

•About 4 million people — many of the same ones — could pay more because of a new $2,500 limit on flexible spending accounts, which can be used to shield medical expenses from taxation.

•The tax that rendered the law constitutional, to be assessed on those who fail to buy mandated health insurance, could hit about 4 million mostly different people across all income brackets.

The law's impact on middle-income taxpayers "is on average going to be relatively small," says Donald Marron, director of the non-partisan Tax Policy Center. "The bulk of the taxes are aimed at corporations and high-income folks."

In fact, about 18 million people will get tax credits under the law if they purchase health insurance plans through new federal or state exchanges.

"Twelve of the 21 taxes in the Democrats' health care law will hit middle-class families," says House Ways and Means Committee Chairman Dave Camp, R-Mich. "That's a double-hit on both families and job creators already struggling with the high cost of health care."

"The Affordable Care Act is the largest health care tax cut in history," says Jason Furman, deputy director of the White House National Economic Council. "It will provide a significant net tax cut for middle-class families and the millions of Americans who will seek affordable insurance in the years ahead."

In addition to hitting upper-income people through higher Medicare and capital gains taxes, the law goes after health care providers. Nearly $200 billion, or 30% of the revenue, will come from taxes and fees on insurers and their most expensive health plans. Large employers who fail to cover workers will pay nearly $100 billion. Drugmakers and medical device manufacturers will chip in with $63 billion, or nearly 10% of the total.

Republicans insist much of the tax burden will get passed along to middle-income taxpayers. Sen. Orrin Hatch, R-Utah, top Republican on the Senate Finance Committee, notes one in 10 of those taxed for failing to buy health insurance will be below the federal poverty level.