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How Obamacare Is Taking a Bite Out of CEO Pay

Obamacare is known for overhauling how millions of how Americans buy health insurance, but it is also quietly having an effect on another key aspect of health care costs: executive pay.

That’s because the law includes a little-known rule that puts a $500,000 cap on how much health insurers can deduct from their taxes for top executives’ compensation. The outcome? At least $72 million was returned to taxpayers last year, based on the pay of top executives at America’s top 10 largest publicly traded health insurance companies, according to a report from the left-leaning Institute for Policy Studies (IPS).

The $500,000 deduction limit was sparked by concern that health insurers, which were expected to be flooded with new customers under Obamacare, would lavish their CEOs with higher pay, notes Sarah Anderson, Global Economy Project director at IPS. The cap was meant to deter such corporations essentially profiteering from Obamacare, she notes.

“It’s a common sense thing to do,” Anderson said. “They can still pay them as much as they like, but they can’t deduct it.”

Read more: CBS News

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