The recent healthcare reforms of the Affordable Care Act, known colloquially as Obama care, have been vehemently opposed by some sections of the US Congress. Three United States senators have now released a legislative outline of how the Republican Party would abolish and replace President Barack Obama’s health care plans, including tax credits to help individuals pay for the required health insurance. The Patient Choice, Affordability, Responsibility and Empowerment (CARE) Act would eliminate 47 tax or tax-related provisions that the Affordable Care Act (ACA) has, or will in the future, impose to pay for Obama care.

Those provisions include the 3.8 percent net investment tax imposed on individuals, estates and trusts, and the 2.3 percent excise tax on medical devices, which are already in effect, and also the individual and employer mandatory tax penalties, the health insurer tax and the reinsurance fee.

The GOP proposal would provide a targeted tax credit to certain individuals which could solely be used for the purpose of helping to buy health care. American citizens with annual incomes up to 300 percent of the Federal Poverty Level (FPL) (USD34,470 in 2013) would be eligible to receive an age-adjusted, refundable tax credit to buy health coverage or health care services.

The value of the tax credit would be reduced in value as an individual’s income increased to between 200 to 300 percent of FPL. Individuals with annual income above 300 percent of FPL would not be eligible for a credit. This maximum level is lower than in the ACA, which provides help for those earning up to 400 percent of FPL, or USD45, 960.