Critter Corner: How Will the New Tax Law Affect Healthcare?
Hi Bebe,
I recently read your article about the new tax law. It didn’t talk much about healthcare. Do you know how the tax overhaul will affect healthcare?
Thanks for your help,
Heath Kerr
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Dear Heath,
The new tax law will actually be the most important health care legislation enacted since the Affordable Care Act (ACA) in 2010, according to the Harvard Business Review. The law’s two major health-related aspects are:
– the elimination of the penalties paid by people who fail to have health insurance as required by the so-called “individual mandate,” and
– the bill’s overall impact on the federal deficit — which will increase by an estimated $1.45 trillion after allowing for predicted economic growth.
Older individuals will certainly be affected, though differently in different parts of the country. For example, a 60-year-old not receiving subsidies could face premium increases of $1,781, $1,469, $1,371, and $1,504, respectively, in Alaska, Arizona, Nevada, and Maine.
Harvard Business Review states in a recent article that when it comes to Medicare, the new tax law could mean increasing the eligibility age from 65 to 67 or beyond (resulting in fewer covered elderly), caps on spending per beneficiary (possibly reducing covered benefits), or increases in cost-sharing that would lead to beneficiaries using fewer services. For Medicaid, reforms would likely lead similarly to fewer people covered, reduced benefits, and/or higher cost-sharing.
Because of the speed with which it was pushed through Congress, the health care implications of the tax legislation got little attention in the debate.
We will keep you updated as more information becomes available.
Purrs,
Bebe