Federal Tax Overhaul, Repeal of Individual Mandate Debated in Congress

Posted on December 05, 2017

Members of the U.S. House and Senate are working to reconcile their two versions of the Tax Cuts and Jobs Act, which aims to simplify the U.S. tax code, but also contains provisions that would have serious repercussions for patients and hospitals in Michigan.

Among the provisions in the sweeping legislation, the Senate version of the bill would repeal the individual health insurance mandate that was enacted as part of the Affordable Care Act (ACA). The Congressional Budget Office estimates that repealing the individual mandate would result in the loss of health insurance coverage for millions of Americans and an increase in health insurance premiums.

Additionally, the different versions of the bill include several provisions that would negatively impact patients and hospitals. The House version of the bill would eliminate patients’ ability to itemize deductions for large medical expenses and includes changes to the tax code related to tax-exempt bonds, which would limit not-for-profit hospitals’ ability to access low-cost capital. Both versions of the bill would eliminate the ability to do “advance refunding,” which hospitals use to refinance outstanding debt at lower interest rates.

The bill could have another major cost to patients and hospitals, as it would trigger a sequestration order that results in billions in mandatory spending cuts to Medicare, the ACA and other programs under a 2010 pay-as-you-go law that bars adding to the national debt. Congress could pass a new law to avoid the cuts, but that could be difficult in the current political climate.

The Senate passed its bill in the early morning hours of Dec. 2 and the House acted Nov. 16. Republican leaders have said they would move quickly with reconciliation, with the hope of passing a final version and getting it signed into law before Christmas.

Featured in Monday Report. Click to view the full edition. The MHA, along with the American Hospital Association and several other groups, urge Congress not to include a repeal of the individual mandate in the final version of the legislation. MHA members, MiCare Champions and other healthcare advocates should contact their U.S. representatives to urge them to protect the individual mandate and also thank Sens. Debbie Stabenow and Gary Peters for their continued opposition to this provision.

Members with questions should contact Laura Appel  at the MHA.

Tags: ACA, Medicare, federal tax reform, infrastructure, bond

Posted in: Top Issues - Healthcare

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