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.

Senate Attempts to Stabilize Healthcare with Bipartisan Agreement

  

Yesterday, Senate HELP Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) announced they had reached a short-term deal bipartisan healthcare legislation. This legislation would stabilize individual insurance markets and protect patients and families from premium spikes and uncertainty caused by the Trump Administration’s two decisions last week intended to destabilize the ACA marketplaces.

The deal negotiated by Alexander and Murray would fund payments to help lower costs for families, provide added flexibility to states, protect essential health benefits for patients, and restore investments for open enrollment outreach.

The bill would:

  • Restore Cost-Sharing Reduction payments and the certainty that is crucial to continued market stability and affordability for families. Insurers have raised rates by as much as 30% because of the uncertainty around CSR payments and continue to threaten exit from insurance markets.
  • Restore certainty to health care markets by ensuring CSRs will continue through 2017, 2018, and 2019.
  • Include steps to ensure 2018 enrollees receive the financial benefit of CSRs for the coming year.
  • Require the Department of Health and Human Services (HHS) to increase funding for outreach and enrollment assistance activities for 2018 and 2019; this is a top priority for ANA with Open Enrollment beginning November 1.
  • Put in place extensive reporting requirements to make sure HHS is held accountable for implementing Open Enrollment in 2018 and 2019.

Most importantly, the bill would generally keep in place essential health benefits and protections for pre-existing conditions with the exception of consumers who qualify for catastrophic plans.

The legislation will need 60 votes to pass through the Senate and ultimately Majority Leader Mitch McConnell will determine if the bill goes to the floor for a vote. In addition, lawmakers will need to convince the President that this bill will benefit the consumer and not the insurers. To date, the President has responded with mixed reviews.

President’s Latest Attempt to Destabilize Healthcare

  

This morning, despite ongoing bipartisan efforts to stabilize the individual insurance market following the failure of Congress to pass legislation to repeal and replace the Affordable Care Act, President Trump signed an Executive Order (EO) allowing for the creation of new association health plan (AHP) options for small employers and individuals. AHPs currently exist and are used primarily by small businesses to purchase group health coverage, but are regulated under the provisions of the ACA in the same way as coverage purchased on the individual health insurance market. Today’s EO in effect treats AHPs as large group health insurance plans and allows coverage under AHPs to be sold across state lines.

Treating AHPs in this way exempts them from important provisions covered under the ACA. As a reminder, the ACA includes provisions on insurance plans sold on the individual market which:

  • Require plans to cover 10 Essential Health Benefits including reproductive and maternal health services and preventive services;
  • Forbid insurers from charging more to individuals due to pre-existing conditions;
  • Limit the amount insurance companies can charge to older individuals based on age.

The American Nurses Association opposes any action – legislative or executive – which would put at risk the ability of Americans to access and receive high quality healthcare. This is particularly true when it comes to the most vulnerable Americans. It has become increasingly clear that this administration is more concerned with scoring political points and reversing gains made in healthcare than it is about actually ensuring high quality healthcare coverage for all Americans.

As a result of this EO, AHPs would be permitted to offer coverage that does not include the 10 Essential Health Benefits required to be covered under insurance plans offered through the ACA exchanges. AHPs would also be allowed to charge different prices to consumers based on age and health – including charging more for individuals with any host of pre-existing conditions.

This EO allows AHPs to sell insurance coverage which offers fewer benefits at variable prices depending on an individual’s health. This would certainly be an attractive option for someone who is young, healthy, and does not anticipate needing to use a high volume of healthcare services. The flipside is that this would have a negative impact on older adults and individuals with pre-existing conditions.  The cruel irony with this plan is that these individuals would likely be stuck with plans in the individual marketplace, as they would not be able to afford the coverage offered under AHPs – which would likely not provide coverage for necessary care.

Furthermore, these insurance plans are ripe for instances of fraud, abuse, and insolvency. The Government Accountability Office in 1992 issued a report which slammed similar small business insurance arrangements and noted that they left hundreds of thousands of enrollees with millions of dollars in unpaid claims and widely failed to meet state insurance laws and regulations. The GAO report found that some plans tried to duck under state insurance regulations entirely. This type of wild, wild west approach to insurance coverage does not offer the comprehensive level of coverage at a low price that the Trump administration claims. Based on the provisions of this EO, we also expect several lawsuits to challenge this based on the legality under current federal law and on the insurance across state lines aspect.

In essence, this latest gambit by the Trump administration is another attempt to undermine the system put in place by the ACA at the expense of some of the most vulnerable Americans. Combined with the administration’s move last week to weaken the ability of Americans to access sexual and reproductive healthcare services – particularly contraceptives – covered under the ACA, this represents a significant effort to endanger the healthcare of all Americans.

We urge Congress and the Administration to continue to work toward market stabilization and to strengthen the existing system – which has resulted in coverage for tens of millions more Americans since 2014 – and to put an end to these attempts to sabotage Americans’ healthcare for political gain. ANA is committed to working with Congress and the administration on legislation and policy which aligns with our four core principles of health system transformation. This Executive Order, however, represents a major step backward from achieving those principles.

(Photo: Doug Mills/The New York Times)