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Study Finds Santa Monica Among Affluent Cities with Biggest Subsidy Hikes under Proposed Health Care Plan  

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By Niki Cervantes
Staff Writer

March 21, 2017 -- People in Santa Monica who buy their own health insurance will see average subsidies under the proposed American Health Care Act rise from zero to $6,000 a year, a hike matched by a few other well-off cities, a new study found.

Under the Affordable Care Act, the legislation Trump and the Republican-led Congress is trying to repeal, many policy owners in Santa Monica -- where the average family income is about $107,000 -- did not qualify for a federal subsidy.

But the proposed Republican legislation slated for a vote on Thursday would reverse that scenario for residents using non-employer-based health insurance in Santa Monica and 23 other cities, the study by Wallet Hub found.

Instead, the AHCA would provide average subsidies of $6,000 for those Santa Monicans, the report said.

The analysis released Monday includes 457 large, medium and small cities, or those with 75,000 to 125,000 residents.

Other cities with residents receiving the highest average subsidy ranged from Torrance, Huntington Beach, Thousand Oaks, Newport Beach, Carlsbad and Alameda in California to Scottsdale in Arizona, Boca Raton in Florida, Troy in Michigan and Sugar Land in Texas.

Hardest hit in the study was Yuma, Arizona. Residents in that city –- which is heavily Hispanic and in 2014 had a jobless rate of almost 24 percent, the nation’s highest –- would see average tax subsidizes drastically reduced.

WalletHub said Yuma residents would receive subsidies of $5,000 a year under the proposed legislation, compared to $12,815 a year under Obamacare, or a 61 percent cut.

Others cities that would see big cuts in subsidies are Anchorage, Alaska; Syracuse, New York and Chattanooga, Tennessee, where the prevalence of low-wage jobs has contributed to a poverty rate of 27 percent.

The House GOP unveiled the American Health Care Act on March 7 to vocal opposition from Democrats and even some Republican legislators with districts that depend on the ACA subsidies ushered in by former President Barack Obama.

In repealing and replacing the ACA, the GOP would replace Obama’s mandate for most Americans to have health insurance with a new system of tax credits to induce people to buy insurance on the open market.

Republicans say Obama's plan is too restrictive, relies on penalties rather than open-market incentives and will soon collapse.

Opponents of the proposed GOP plan say that it rolls back Medicaid expansions and will leave many non-affluent people -- particularly senior citizens on fixed incomes -- unable to afford health insurance at all.

Wallet Hub makes note in its report of a nonpartisan Congressional Budget Office analysis, released last week, that showed the proposed plan would increase the number of people without health insurance by 24 million by 2026.

The plan also shaves $337 billion from federal budget deficits over that period.

In the Wallet Hub study, a wide range of experts weigh in on the impact of the GOP’s plan and whether it can survive a public unhappy with the cost of Obamacare but relieved to have insurance at all -- often for the first time.

WalletHub, a personal finance website, compared U.S. cities of varying sizes based on the difference in premium tax subsidies that a joint-filing household would receive under the AHCA and the Affordable Care Act.

The full report is available online.

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