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Tax Bill Healthcare Provision Portends Major Changes

December 6, 2017

It has been called “a behemoth piece of legislation that could widen American economic inequality while diminishing the power of local communities to marshal relief for vulnerable people.”  But it has also been hailed as “a comprehensive overhaul . . . [that] will ignite our economy with levels of growth not seen in generations,” creating “more jobs, higher wages and a better standard of living.”

Despite the gaping disparity in viewpoints and major disagreements on whether the changes would benefit or harm Americans, there is little dispute that the Tax Cuts and Jobs Act passed late last week by the Senate would bring with it sweeping changes in healthcare.

Most notably, the tax bill calls for the elimination of the individual health coverage mandate, the Affordable Care Act’s requirement that most Americans carry health insurance.  The bill’s supporters contend this change would give Americans greater freedom of choice regarding their health insurance by allowing them to opt out of something they do not want to pay for.  However, opponents note that the individual mandate was designed to ensure a stable health insurance market by requiring younger and healthier Americans to purchase coverage along with older, sicker individuals.  The Congressional Budget Office (CBO) and the Joint Committee on Taxation estimate that the removal of this requirement would result in 13 million fewer people with coverage by 2027, as well as a 10 percent increase in premium costs.  CBO also estimates that four million people under the age of 65 would no longer have health coverage in 2019 if this provision remains in the bill. 

Not surprisingly, the legislation has drawn criticism from many healthcare organizations and advocacy groups.  The tax overhaul “would reach deep into the nation’s healthcare system, with a clear dagger to a core aspect of the Affordable Care Act and broader ripple effects that could threaten other programs over time,” wrote Amy Goldstein, healthcare policy writer for the Washington Post.

On December 4th, a coalition of 15 non-partisan patient and consumer groups, including the American Cancer Society, the American Diabetes Association, the American Heart Association and the American Lung Association came out against the bill, asserting that the removal of incentives for younger and healthier people to buy insurance would destabilize the health insurance market.  “Having young and healthy people as part of the insurance pool helps keep premiums manageable for everyone,” the coalition said in a statement.  “The move is the latest in a string of actions by both Congress and the administration that puts affordable, adequate and accessible care for patients and families further out of reach.”

According to AARP, the tax bill would lead to “a harmful step backward for older adults,” reversing important gains made with the ACA in the rate of insured Americans in the 50- to 65-year age bracket.  (The uninsured rate for this age group dropped from 15 percent in 2013 to nine percent in 2016.)

In addition, the large deficit created by the tax plan would catalyze spending cuts to essential programs such as Medicare and the Prevention and Public Health Fund that would seriously undermine progress in creating a healthier nation, the American Public Health Association said in a statement. 

Rick Pollack, president and CEO of the American Hospital Association, stated that “the goal of the ACA was to extend coverage and, as a result, millions have benefitted from access to needed care.  We must protect that access to care for those who need it and ensure the most vulnerable patients are not left behind.”

On Tuesday, December 5th, the House voted to move ahead on negotiating with the Senate to work out the differences in the two versions of the tax overhaul.  The House passed its version last month.  Republican leaders hope to finish the bill and send the measure to President Trump before Christmas.

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