Q&A: Tax Bill Impacts on Health Law Coverage and Medicare - NBC 10 Philadelphia
President Donald Trump

President Donald Trump

The latest news on President Donald Trump's presidency

Q&A: Tax Bill Impacts on Health Law Coverage and Medicare

Trump has said he won't cut Medicare, and the program doesn't even seem to be mentioned in the tax bill, but the AARP is saying that health insurance for seniors could be jeopardized



    Senate Narrowly Passes Tax Reform Bill

    The GOP tax bill passed the Senate on Dec. 2, 51-49, after a late-night round of amendments and voting. If the bill passes reconciliation with a House bill, it will bring the first overhaul of the tax code in 31 years. (Published Monday, Dec. 4, 2017)

    The tax overhaul Republicans are pushing toward final votes in Congress could undermine the Affordable Care Act's health insurance markets and add to the financial squeeze on Medicare over time.

    Lawmakers will meet this week to resolve differences between the House- and Senate-passed bills in hopes of getting a finished product to President Donald Trump's desk around Christmas. Also in play are the tax deduction for people with high medical expenses, and a tax credit for drug companies that develop treatments for serious diseases affecting relatively few patients.

    The business tax cuts that are the centerpiece of the legislation would benefit many health care companies, but there's also concern among hospitals, doctors and insurers about the impact on coverage. Here are some questions and answers on how the tax bill intersects with health care:

    Q: Trump has said he won't cut Medicare, and the program doesn't even seem to be mentioned in the tax bill. Why is AARP saying that health insurance for seniors could be jeopardized?

    FBI Deputy Director Fired Two Days Before Retirement

    [NATL] FBI Deputy Director Fired Two Days Before Retirement

    Attorney General Jeff Sessions fired former Deputy Director Andrew McCabe, who was a regular target of President Donald Trump's anger and criticism.

    (Published Saturday, March 17, 2018)

    A: The tax bill would increase federal deficits by about $1 trillion over 10 years, even after accounting for stronger economic growth expected from tax cuts. More red ink means higher borrowing costs for the government, and that would reduce the options for policymakers when Medicare's long-postponed financial reckoning comes due.

    Medicare's giant fund for inpatient care isn't expected to start running short until 2029. That's still more than a decade away, but a federal anti-deficit law currently in effect could trigger automatic cuts as early as next year — about $25 billion from Medicare.

    House Speaker Paul Ryan, R-Wisc., and Senate Majority Leader Mitch McConnell, R-Ky., said in a joint statement last week that such speculation is unfounded. "This will not happen," the GOP leaders said. Congress has previously waived such cuts, they explained, and there's no reason to think this time would be different.

    Nonetheless others see an increased risk to Medicare.

    "The greater concern is even if the automatic cuts don't take place, the tax bill just exacerbates the pressure on the federal deficit and Republicans have been pressing for cuts in Medicare for some time," said Paul Van de Water, a policy expert with the Center on Budget and Policy Priorities, which advocates for low-income people.

    Q: How did "Obamacare" wind up in the tax bill?

    White House Musical Chairs

    [NATL] White House Musical Chairs

    Many top positions in President Donald Trump’s Cabinet and the West Wing have been in flux.

    (Published Wednesday, March 14, 2018)

    A: The Senate version repeals the Affordable Care Act's tax penalties on people who don't have health insurance. That would result in government savings from fewer consumers applying for taxpayer-subsidized coverage, giving GOP tax writers nearly $320 billion over 10 years to help pay for tax cuts.

    What's more, repealing the fines would deal a blow to the Obama-era health law after a more ambitious Republican takedown collapsed earlier this year.

    Q: Those fines have been very unpopular, so how could repealing them undermine the health law? Other parts of the ACA will remain on the books.

    A: Premiums will go up, and that's never popular. The fines were meant to nudge healthy people to get covered. Because insurance markets work by pooling risks, premiums from healthy people subsidize care for the sick.

    Without some arm-twisting to get covered, some healthy people will stay out of the pool. That's likely to translate to a 10 percent increase in premiums for those left behind, people more likely to have health problems and need comprehensive coverage, says the Congressional Budget Office.

    The CBO also estimated that 13 million more people would be uninsured in 2027 without the penalties. If they have a serious accident or illness, uninsured people get slammed with big bills, and taxpayers wind up indirectly subsidizing the cost.

    White House: 'No Immediate Personnel Changes at This Time'

    [NATL] White House: 'No Immediate Personnel Changes at This Time'

    Sarah Huckabee Sanders told the press Friday that no more staff changes were coming, and that the Chief of Staff told staffers they "shouldn't be concerned."

    (Published Friday, March 16, 2018)

    Q: So just taking away an unpopular penalty would destabilize the health insurance law?

    A: Repealing the fines is part of a broader context.

    The Trump administration slashed the advertising budget for ACA sign-ups this year, at the same time that it cut the enrollment window in half. The administration is working on rules that would allow broader sale of skimpy insurance plans with lower premiums, which would also draw healthy people away from the health law markets.

    "The program would still exist, but it would be quite hobbled at this point," said Larry Levitt of the nonpartisan Kaiser Family Foundation.

    A separate bipartisan bill to stabilize health insurance markets is still pending in the Senate, and it remains unclear where the markets will settle out.

    Q: Taxes and health care are connected. Anything else to flag in the GOP bills?

    Texas Dems Say Russian Hackers May Be Targeting Convention

    [NATL] Texas Democrats Say Russian Hackers May Be Targeting Their Convention

    While organizing for local conventions, Glen Maxey, legislative affairs director for the Texas Democratic Party, found almost 50 email registrations that seemed odd. He thinks it was a foray into Texas politics by Russian hackers.


    (Published Friday, March 16, 2018)

    A: The House bill repeals the tax deduction for people with high medical expenses not covered by insurance. The Senate bill would make the deduction more generous than what's currently allowed. People could deduct amounts that exceed 7.5 percent of their income. The differences would have to be resolved in conference.

    In order to raise money to pay for lower tax rates, the House bill eliminates a tax credit available to drug companies that develop medications for people with rare diseases; the Senate bill scales back the tax credit. Organizations representing patients are pushing to keep the credit intact.