Tax Reform and Spending Measures Threaten Healthcare for Millions – Including Children

  

Congressional Republicans threaten to put coal in the stockings of millions of Americans this holiday season, as they are poised to pass a massive tax bill – the Tax Cuts and Jobs Act – that promises to significantly reduce the number of Americans with health insurance. Meanwhile, House members have decided to play politics with the health care coverage of 9 million children, as they have placed a provision to re-authorize the Children’s Health Insurance Program (CHIP) into a spending measure that could potentially lead to a government shutdown.

The Tax Cuts and Jobs Act

The push toward final passage of a tax reform bill took a major step forward this week, as House and Senate Republican members of the conference committee  settled on a compromise version of the Tax Cuts and Jobs Act. Among its many provisions, the bill eliminates the Affordable Care Act’s individual mandate, which requires Americans to purchase health insurance or pay a financial penalty. As we have written before, the Congressional Budget Office (CBO) estimates that repealing the individual mandate would result in 13 million fewer Americans having health insurance. Such a reduction in coverage would result in negative health outcomes, higher costs, and a decreased focus on primary care and preventive services.

The bill also lowers the threshold for an individual to claim a medical expense deduction. More Americans will also likely find it necessary to take this deduction – without health insurance coverage, they will be much more likely to experience crippling medical expenses.  The bill allows individuals to deduct medical costs greater than or equal to 7.5% of an individual’s income; this is lower than the 10% threshold under current law. This is deceptive, however, as the threshold to claim the medical expense deduction will return to 10% in tax year 2019 and is only available to tax filers who itemize their deductions.

The likelihood for passage of the Tax Cuts and Jobs Act that came out of conference committee is still fairly uncertain. The conference committee held its only public meeting yesterday. The next steps in the process will be votes on the floors of the House and Senate. The timeline for these votes is not crystal clear, but the expectation is that both chambers will vote on final passage next week. Once this occurs – and assuming that the bill passes both chambers – it will head to President Trump’s desk, at which point he will sign it into law.

Children’s Health Insurance Program

Congress recently passed a continuing resolution to fund the government at current levels through December 22nd. This funding deadline, however, is fast approaching, and Congress will need to pass yet another spending bill by that date in order to avoid a government shutdown. House Republicans have already proposed such a measure, which would extend government funding through January 19th, and provide a crucial five-year extension of CHIP. A point of contention, however, is that the spending measure would fully fund the Department of Defense for the full year with a $73 billion funding increase over current spending levels. This is a non-starter for Congressional Democrats, who have demanded a dollar-for-dollar increase in spending for domestic programs for any spending increase in defense programs.

The funding situation for CHIP is truly dire. Federal spending authorization for the program ran out on September 30th; Congress has failed to act for over two months. While states have been using reserve funding to fill the gap, that excess funding will soon run out. Sixteen states – Washington, Oregon, Idaho, Nevada, California, Texas, Arizona, Colorado, Utah, Minnesota, Virginia, Pennsylvania, Florida, Massachusetts, Delaware, and New Hampshire – anticipate running out of funding by the end of January 2018. It is absolutely critical that Congress pass a CHIP reauthorization immediately; playing politics with the healthcare of 9 million American children is unacceptable.

We urge you to make your voices heard in Washington and to make it known that nurses demand comprehensive and quality care for all of the nation’s citizens, regardless of age or income level. Click here to tell your  representatives loudly and clearly that the Tax Cuts and Jobs Act is bad for Americans’ health and well-being and that CHIP is a crucial program for our children’s health.

 

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Author: Gregory Craig

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

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