Republican Tax Bill Fuels Anxiety Across the Nation’s Healthcare System

Doctors, hospitals, patient advocates and others who work in the nation’s healthcare system are growing increasingly alarmed at the Republican tax bill, warning that it threatens care for millions of sick Americans.

The legislation – which GOP leaders are rushing to pass this week – will eliminate beginning in 2019 the Affordable Care Act penalty on consumers without health coverage, a move many experts warn will weaken insurance markets in parts of the country.

The tax bill, which includes huge tax cuts for corporations, may also force tens of millions of dollars in cuts to the Medicare program under federal budget rules, though congressional leaders say they are confident they can waive the rules as they have in the past.

Most worrisome to many, the bill will open a $1.5-trillion hole in the federal deficit over the next decade. That will put substantial new pressure on government healthcare programs such as Medicare and Medicaid and has already ignited a renewed Republican campaign to cut them back.

“This is a horrid bill,” said John Baackes, chief executive of L.A. Care, a public insurance plan that covers more than 2 million mostly low-income residents of Los Angeles County.

“They haven’t been able to repeal and replace [the healthcare law], so they’ll attack it through the budget by looking for ways knock down the money that’s needed to cover people.”

The GOP tax package – which would reduce the corporate tax rate from 35% to 21% – may mean more money for drug makers and for-profit insurance companies and hospital systems.

But across the country, dozens of healthcare groups, including every major physician association and patient advocacy organization, have urged GOP lawmakers to slow down and at least preserve the insurance requirement.

“This bill leaves too many patients behind and saddles millions more with higher premiums,” said Harold P. Wimmer, chief executive of the American Lung Assn., which was among 16 patient organizations that sent a letter to congressional leaders this month warning that the tax bill could erode sick patients’ access to medical care.

The groups include the American Diabetes Assn., the American Heart Assn., the Cystic Fibrosis Foundation, the Arthritis Foundation, the March of Dimes, the National Multiple Sclerosis Society and the advocacy arm of the American Cancer Society.

Last week, the American Academy of Actuaries sent congressional leaders a similar warning that if the mandate is eliminated, “premiums would increase as a result, reducing affordability and eroding preexisting condition protections.”

At highest risk may be consumers in regions of the country where there are few insurers selling plans now and where premiums are already very high.

Republican leaders have dismissed the objections of healthcare groups and others, arguing that eliminating the penalty on people who don’t get health insurance will remove an unfair government requirement.

“Obamacare’s coercive individual mandate represents perhaps the worst example of the federal government violating individual freedom and liberty,” Rep. Mark Walker (R-N.C.), chairman of the conservative Republican Study Committee.

GOP lawmakers have also rejected analyses by the nonpartisan Congressional Budget Office, independent economists and others that the massive tax cuts in the legislation will drive up the federal deficit. President Trump and his congressional allies say the cuts will fuel economic growth.

But senior Republicans have made no secret of their interest in renewing a push to cut government healthcare programs next year to control the ballooning government debt.

“We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” House Speaker Paul D. Ryan (R-Wis.) said during a recent appearance on “The Ross Kaminsky Show,” a conservative talk radio program in Denver.

“Frankly, it’s the healthcare entitlements that are the big drivers of our debt, so we spend more time on the healthcare entitlements, because that’s really where the problem lies, fiscally speaking,” Ryan said.

Ryan has long advocated major changes to the federal Medicare program.

And each of this year’s leading Republican bills to roll back the Affordable Care Act – commonly called Obamacare – would have slashed hundreds of billions of dollars of federal healthcare aid to low- and middle-income Americans.

That would have left some 20 million more Americans without health coverage, according to independent analyses of the GOP repeal bills.

A new push to slash federal support for Medicare, Medicaid and other health programs risks a similar erosion in health protections, warned Dr. Ashok Rai, president of Prevea Health, a medical system in northern Wisconsin.

“We should be looking for ways to control healthcare spending,” said Rai, incoming chairman of the American Medical Group Assn., a leading advocate for making healthcare more efficient. “But when you are talking about blanket cost reductions, that affects a lot of needy people. … The consequences for the health of America would be serious.”

State leaders and healthcare officials in California and other states that rely heavily on state taxes to support their healthcare safety nets worry they will face even more pressure under the tax legislation.

The GOP bill would cap how much taxpayers can deduct in state and local taxes from their federal tax returns, effectively penalizing many taxpayers in states such as California, which has among the highest state income taxes in the country.

Although about 14 million California taxpayers are expected to see a tax cut in 2019 — most of less than $2,000 — nearly 2 million taxpayers will see their taxes increase, driven largely by this new cap, according to an analysis by the Washington-based Institute on Taxation and Economic Policy.

“The fact that Californians would be paying more in federal taxes would inevitably put new pressure on our state and municipal governments to reduce their taxes,” California Health Care Foundation president Sandra R. Hernández noted in a recent blog post.

“Under that scenario, it is not hard to imagine a new wave of painful state and local budget cuts.”

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