How People with Diabetes Might Be Impacted by the Tax Overhaul

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Here are three ways the proposed tax overhaul might impact people with diabetes.

It seems likely that a Republican-led bill to overhaul the U.S. tax code will pass the Senate; a similar tax overhaul bill has already passed the House of Representatives. If both bills pass, a conference between lawmakers of the two legislative bodies will meet to try and iron a compromise between the two bills that will be voted on again and then sent to President Donald Trump for his signature.

If you haven’t been tracking this bill, you’re not alone; it hasn’t garnered nearly as much publicity as various stalled efforts to repeal and replace the Affordable Care Act. Those repeal bills attracted near unified opposition from diabetes advocacy organizations and most other chronic care advocacy organizations. However, if this tax bill passes, it may reshape the health insurance marketplace for people with diabetes and other chronic conditions, and advocates for health care access warn it could leave millions without affordable coverage.

The bill(s)

It’s important to note that we don’t have a final version of the Senate bill to examine in depth, so what we can glean about the bill comes from various reports and proposals that have been floated around in recent weeks.

Here’s the big picture: Those in favor of the tax overhaul say that it will reduce taxes and simplify the tax code; they argue this will free up money to power the economy through increased investment, job creation, and consumer spending. Detractors of the bill say many Americans in the lower-income and middle-income tax brackets will end up paying more taxes in the long run with the elimination of many deductions and after temporary tax cuts expire; they argue this overhaul will primarily benefit corporations and the rich in the long run.

What the bill will mean for people with diabetes

The ultimate impact of the tax overhaul on the diabetes community will depend on what version ultimately gets passed. Here, however, are the potential areas of concern:

-The Senate version of the bill repeals the mandate that individuals must have health insurance. This is the cornerstone rule of the Affordable Care Act, and was put in place to ensure that health insurance companies would have enough customers to meet the requirement to provide insurance for all, including high-volume users like those with chronic conditions. A repeal of the individual mandate would cause some of the healthiest individuals to leave the health insurance marketplace, and economists predict this will lead to significantly higher insurance premiums for those who remain.

Senator Susan Collins (R-Maine) has said that the tax overhaul bill would come with the promise of the passage of a pair of separate bills that would keep premiums down. These bills would restore ACA insurance payments recently withheld by the Trump administration and provide reinsurance payments to encourage insurance companies to afford to cover those with chronic conditions. Health care advocates, however, say the proposed amendments wouldn’t cover the money lost by the repeal of the individual mandate.

-The House bill contains a provision that would end the tax deduction for those who have spend 10 percent or more of their income on medical expenses. This deduction is primarily utilized by those taxpayers who experience serious medical issues or who have chronic conditions. Those who have high out-of-pocket costs for insulin or pump supplies would no longer be able to deduct those costs on their end-of-year federal taxes.

-Both the House and the Senate plans would call for steep tax cuts that would significantly add to the federal deficit. This would trigger a law that requires deficit spending to be offset by mandatory spending cuts or reform to social welfare programs. This most certainly means that it would likely lead to steep cuts in the Medicare and Medicaid programs.

We will keep you updated on this bill as it winds its way through the legislative process.

-Craig Idlebrook

If you have a story you would like to share with the Glu community, please send your pitch to CIdlebrook@T1DExchange.org.  

 

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