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.

 

Tax reform and individual mandate repeal put patients in the crosshairs

  

With the Senate speeding toward a final vote on tax reform legislation, Majority Leader Mitch McConnell (R-KY) and his leadership team are considering the inclusion of two additional health care proposals. Their hope is that these proposals will persuade undecided Senators to vote yes and make up for the fact that the bill includes the misguided decision to repeal the individual mandate. Unfortunately, while these proposals may have merit on their own, they won’t be enough to mitigate the damage caused by individual mandate repeal, which the Congressional Budget Office (CBO) estimates will lead to 13 million Americans losing health coverage.

Proponents of the two proposals have claimed that they would at least mitigate – if not completely undo – the harm of individual mandate repeal. The first, from Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA) would restore cost sharing reduction (CSR) payments through 2019, after the Trump administration unilaterally decided to end the payments earlier this year.

The second, from Sens. Susan Collins (R-ME) and Bill Nelson (D-FL), provides $2.5 billion in both 2018 and 2019 for state reinsurance programs, which reimburse insurers for some or all of the costs associated with highest-cost claims.

However, without the individual mandate, fewer healthy people will sign up for coverage and average costs and premiums across the individual market will rise by 10 percent, according to the CBO; some providers have projected even larger increases. To offset this 10 percent increase, $10 billion in federal reinsurance funds would be needed each year (as opposed to the temporary “solution” offered by Collins-Nelson).

Worse, repealing the individual mandate increases uncertainty and instability about future open enrollment periods, risk pool profiles, and premium rates. Put simply, insurers would be forced to reconsider whether they want to continue taking part in the health insurance marketplace at all, a recipe for further disruption and additional loss of coverage among individual market enrollees.

Finally, while the Alexander-Murray proposal to reinstate CSR payments would be a laudable approach on its own, CBO has found that it would also fail to reverse the coverage reductions that will result from individual mandate repeal. In short, repeal creates a problem far bigger than the one Alexander-Murray was initially intended to address.

With a final vote looming, now is the time to tell your Senators that they should stand with patients and reject this bill. In the absence of substantive debate and expert input, grassroots pressure is the best hope for stopping this harmful legislation once and for all.

Repealing the Individual Mandate is the Worst Tax Reform Idea Out There

  

As the push for tax reform on Capitol Hill moves forward, President Trump continues his misguided calls to repeal the Affordable Care Act’s (ACA) individual mandate as part of the final package. Unfortunately, he isn’t alone.

Despite Congress’s repeated failure to replace the ACA, some Republicans in both the House and Senate still seem convinced that the missing tax reform ingredient is a provision that the Congressional Budget Office (CBO) has estimated would result in 13 million Americans losing coverage, and an overall increase in premiums for health care consumers nationwide.

Experts who have analyzed the ACA have repeatedly found that without the mandate, the health care system the bill implemented simply would not work. With the mandate in place, those who might otherwise be less likely to obtain coverage – such as young adults and those who currently enjoy good health – are incentivized to get covered. This in turn leads to lower premiums across the board by offsetting costs for sicker patients.

Despite the harm this policy proposal would inflict on health care consumers, any serious consideration of the individual mandate repeal is more likely fueled by the fact that the Republican base is dissatisfied with the President and Congress’s inability to advance their overall legislative agenda, perhaps most notably when it comes to health care.

The proposal to repeal the individual mandate is all the more puzzling given recent news that the two week-old Open Enrollment period has seen a surge in consumers signing up for or renewing their health coverage via the federal marketplace, despite the Trump administration’s refusal to adequately promote it. Moreover, voters in Maine voted last Tuesday to expand Medicaid and help an estimated 70,000 low-income residents obtain coverage. These are just the latest indications that voters overwhelmingly support policies that increase access to care, rather than reduce it.

When it comes to the individual mandate and health care reform in general, we continue to urge Congress to listen to nurses when considering the best way to move forward on transforming America’s health care system. Join us and add your voice by clicking here.