House Tax Bill’s Impacts on Nurses and Consumers

  

It is officially tax season on Capitol Hill, with the House of Representatives currently in the midst of marking up their tax reform proposal, Tax Cuts and Jobs Act. They contend that this tax reform bill will spur economic growth and cut taxes for the middle class. At ANA, we want to focus on a few provisions in this bill that could impact nurses and healthcare consumers. These provisions are as follows:

  • Repeal of Medical Expense Deduction: Repeal of this provision would make it more difficult for low- and middle-income families to afford medical care. The current law allows a taxpayer to claim an itemized deduction for out-of-pocket medical expenses for themselves, a spouse, or a dependent. This is allowed only to the extent that the expenses exceed ten percent of the taxpayer’s adjusted gross income. This tax deduction is critical because it allows low- and middle-income families and those with complex and costly medical conditions to afford treatment without being financially crushed.
  • Repeal of the Deduction for Interest Payments on Qualified Education Loans and Repeal of the Deduction for Tuition and Related Expenses: Current law allows an individual to claim a deduction for qualified tuition and related expenses incurred or for interest payments on qualified education loans for qualified higher education expenses of the taxpayer, their spouse, or dependents (a taxpayer can only claim one of these deductions). The repeal of these deductions could make it more difficult for nursing students and recent nursing graduates to pay off their student loans or could discourage individuals from nursing school. This is important considering the ongoing push for registered nurses to receive a BSN degree.
  • Repeal of Credit for Expenditures to Provide Access to Disabled Individuals: Current law allows small-business taxpayers to claim a 50% credit per year for expenditures of between $250 and $10,250 for providing access to disabled individuals. The repeal of this tax credit could make it more likely that a small business would choose to defer the purchase of improvements, which would help disabled individuals access the business.

Senate Republicans have yet to release their tax plan, but it is expected to differ considerably from the House version. It is unclear whether the Senate version will include the tax code changes listed above. ANA will continue to monitor these developments and their potential impact on nurses and healthcare consumers.

Finally, even though the last Congressional attempt to repeal and replace the Affordable Care Act died in the Senate in late September, Congress is still considering a few other pieces of key healthcare legislation. Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA) have not given up on their bipartisan attempt to strengthen the nation’s individual insurance system, though this effort has been put on the back burner now that Congress is in full tax mode.

Congress is also now in the process of reconciling the House and Senate versions of bills which would reauthorize funding for the Children’s Health Insurance Program (CHIP); funding re-authorization for this program expired on September 30th, though states have enough funding to pay their CHIP bills through the end of 2017 (with the caveat that the end of 2017 is fast approaching). Congress must pass CHIP legislation quickly in order for states to be able to fund their CHIP programs in 2018. ANA will continue to keep you updated on any healthcare developments on the Hill.

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Author: Gregory Craig

Analyst in the Health Policy Office of the American Nurses Association.

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