What just happened? The Tax Cuts and Jobs Act of 2017
A lot of folks want to know what the new tax law will do to healthcare. The simple answer is, it depends. Broadly, there are two major ways the new tax law could majorly influence healthcare: one, is altering the individual mandate could increase costs of health insurance plans, and two, reducing incoming federal dollars could lead to major cuts in government programs like Medicare or Medicaid.
Let’s start with the Mandate. The individual mandate is basically a tax imposed on folks who did not get health insurance during the year. The tax was relatively small, but without it, some 13 million Americans are estimated to forgo buying health insurance moving forward, (many of whom bought plans on the exchanges). Because many of these 13 million are likely young and healthy, (who don’t believe health insurance is a necessity) this could leave more costly folks in the market, driving up costs. The idea of the individual mandate was to get more people in the pool, thereby lowering costs by more people paying in.
The other way that the new tax law could influence healthcare is future results from the overall decrease in money that comes into the federal coin purse. With less money coming in through taxes, Congress might argue that it now must reduce federal spending. Reductions could very well come out of Medicare or Medicaid, both expanded through the Affordable Care Act (or ObamaCare). Obviously, this would have its own political process, but is a possibility.
If you are interested in “The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018” which lost its original name, “The Tax Cuts and Jobs Act (TCJA),” you can read the full text here