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The Tax Cuts and Jobs Act: Will It Put Health Care Reform Back in Play?

Posted By Louise Probst, Wednesday, January 10, 2018
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law, becoming the first significant U.S. tax code reform since 1986. Like many industries, health care organizations are scrambling to understand what this means for their bottom lines while bracing for seemingly inevitable funding cuts.
The greatest impact on individual insurance coverage is the repeal of the individual mandate penalties from the Affordable Care Act (ACA). According to the Congressional Budget Office (CBO), repeal of the penalties could cause people who were previously buying coverage to step away from it and deter others from purchasing. As many as 13 million additional Americans may be uninsured.
Early 2018, the Department of Labor released a proposal to enable association health plans to offer insurance coverage to individuals and employers in a state, city, county, or that serve an entire industry nationwide. Despite former shortcomings, supporters are optimistic that these will provide more choices in coverage and drive down prices. When they failed previously, there was no "guaranteed issuance." Put in place by the ACA, this provision forbids the use of a person's medical history in underwriting and could minimize the adverse selection issues which doomed prior efforts.
A common belief is that the tax cuts will create a rising pressure to reduce federal spending, and opinions differ on whether this is a good or bad thing. With thirty percent of the federal budget (or $1.25 trillion) dedicated to Medicare and Medicaid funding, it is understandable that these programs might be early targets. Policy experts understand that changes to the programs are needed. Bipartisan committees have studied options to reduce their spending for decades, only to kick the can down the road. The concern is that current political and financial pressures will result in action without appropriate testing and implementation.  Solutions in discussion include an increase in the enrollment eligibility age, reduction in coverage levels, imposed maximum spending limits per beneficiary, or more required cost sharing with beneficiaries. 
While it is unclear whether the U.S. Senate has the appetite to take on Medicare, Medicaid, and health care reforms this year, it does seem certain that the health care reform debate will rise again.

Wishing you all the best in the New Year,  

Louise Probst
BHC Executive Director


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