The United States House of Representatives and Senate have passed the Tax Cuts and Jobs Act which is expected to be signed into law by President Trump before the end of the year. Marking the largest overhaul of our tax system in decades, this bill also makes changes to our nation’s health care system and social safety net.
The bill will add $1.5 trillion to the federal deficit. Those funds will have to come from other federal programs and Congressional leaders have signaled that entitlement reform to programs such as Medicare, Medicaid, Social Security, and public welfare programs will be on their agenda for 2018. Although it is not clear exactly what these cuts could look like, advocates will need to remain vigilant and take action to ensure that patients, particularly those most in need, are not harmed by potential reforms to these vital public programs.
Changes to the Health Care System
The bill will eliminate the penalty that individuals currently pay if they do not have insurance coverage. This effectively repeals the individual mandate altogether. The individual mandate is critical to ensure a balanced marketplace in which healthy people with low health care costs purchase insurance coverage alongside people living with illness who have higher health care costs. A repeal of the individual mandate will create chaos for our health care system as this delicate balance will no longer exist. The Congressional Budget Office predicts that 13 million Americans would lose health insurance over the next 10 years as a result.
Regardless of the mandate, several key provisions put into place by the Affordable Care Act still exist. Insurers will not be able to discriminate based on pre-existing conditions, which is critical to patients with a history of cancer. The expansion of Medicaid, which occurred in 32 states and Washington, DC, will also still remain in place. It is vitally important for patients, particularly those with a history of cancer, to maintain insurance coverage. Many patients, particularly those with lower incomes, will still qualify for subsidies and have options to help them afford health care. During open enrollment, patients can utilize the Cancer Insurance Checklist to help them figure out the best coverage options.
The bill maintains the medical expense deduction. The House version proposed eliminating this provision, however the final bill actually became more patient friendly than current statute. Before this bill, patients who spent more than 10 percent of their household income on medical expenses could deduct expenses above that amount from their taxes. Now, patients will be able to deduct expenses that are more than 7.5 percent of their household income. Cancer patients can incur significant expenses, making this a welcome change.
Changes to Charitable Deductions
The bill alters charitable contribution deductibility. The bill roughly doubles the standard deduction, which could mean fewer people itemize deductions. Only taxpayers who itemize deductions may deduct charitable contributions. This will potentially reduce the number of individuals who will itemize deductions which could have a negative impact on charitable giving. It has been estimated that giving may decrease by up to $20 billion per year.
What the Tax Bill Means for You?
- Hold Members of Congress Accountable: This tax bill will also change our health care and social safety net systems. Thank your Representative and Senators if they voted against it or voice your disappointment if they voted for the bill.
- Stay Vigilant: Reforms to entitlement programs could occur in 2018. Patient advocates must remain up-to-date on potential changes and voice their opinions to policy makers!
- Communicate: If you are concerned about your health care options, reach out to organizations like the Cancer Support Community. We can help to connect you with resources to help you navigate your options.
- Donate or Volunteer: Nonprofits and charities may struggle with fewer donations due to the new tax system. If you can’t donate, consider volunteering or spreading the word that nonprofits will need support in 2018.
- Be Engaged: Stay up to date on the impact of the tax bill, along with breaking news on issues of importance to cancer patients and their loved ones, by signing up to be a Cancer Support Community grassroots advocate.