Nice; all life loss reduced by one. Very VERY nice for 'pay life' effects. Hopefully people can't find a way to repeatedly lose 0 life. (Though this plus, oh, Carrion Howler is pretty much a win condition.)

I'm pretty sure this is broken at this CMC.

Actually it doesn't win with Carrion Howler due to the -1 toughness. There isn't much that I can see that this does break with; Wall of Blood still needs a Fling (or Rolling Stones) effect... Yawgmoth's Bargain was plenty broken already... Spatial Binding and Mischievous Poltergeist get better but aren't exactly snapped in two. Same with Unfulfilled Desires and Vile Consumption.

Of course, this also doubles as an Urza's Armor with a body attached that's slightly better in some situations, yet worse in others.

Also, see Patron of the Kitsune and Righteous Cause, which are vaguely comparable.

how about the reverse? when you gain life, you lose 1 life.

Because that's a really silly "fake" drawback. It's something you would put on a creature thinking it's a drawback, but then you realize that it would just go in a deck with no lifegain. Suddenly, it's not a drawback at all.