How Will America’s New Tax Bill Impact Health Care?

By Paul Fuhr 12/08/17

Scientific American breaks down the ways that the new tax bill will affect health care.

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Lawmakers are in a race against the clock to get a revised tax bill in front of President Trump by Christmas. According to a Scientific American piece, the tax overhaul will have a far-reaching impact. In fact, the tax bills that have already passed the House and the Senate could very well redefine American health care as we know it.

The Scientific American story focuses on several key ways that the new legislation could affect health care. And while many believe that health care companies will benefit from the new bill, not everyone is convinced it will help. Doctors, hospitals and insurers alike are concerned that the new bill won’t take them into consideration, causing irrevocable, long-term damage to health policy.

One of the first ways the new bill will impact policy is by eliminating the “so-called individual mandate” for most people to have health insurance. In the latest version of the Senate’s tax bill, the requirement for people to carry insurance isn’t entirely gone, but it does remove the tax penalty people would face if they choose to remain uninsured.

As a result, the article says that 13 million fewer people would have insurance in the next decade, citing estimates from the Congressional Budget Office (CBO). The CBO also estimated that insurance premiums would increase by 10% per year than they otherwise would. “That is because healthier people would be most likely to drop insurance in the absence of a fine, so insurers would have to raise premiums to compensate for a sicker group of customers,” Scientific American observed. “Those consumers, in turn, would be left with fewer affordable choices.” More troubling is the prospect of insurers dropping out of the market entirely if there’s no requirement in place for healthy people to carry insurance.

All eyes are on how the tax bill will impact Medicare. Even while there are no specific Medicare changes spelled out in the revised tax bill drafts, major cuts to federal programs would be required. Both versions of the bill call for $1.5 trillion to be added to the deficit over the next decade. If passed, federal officials would be required to reduce spending to the tune of $136 billion.

While that sounds good in theory, Scientific American said, the $136 billion expense-reduction would come at the expense of Medicare (about $25 billion). Most of the cuts would come from payments to insurance providers. The bill also threatens a little-used tax deduction for medical expenses, which has sparked the ire of groups like AARP, who argue that the deduction is vital to the people who do take advantage of it.

The story observed that the tax overhaul would also potentially impact graduate students and pharmaceutical companies in completely different, albeit similarly dramatic ways. In the House version of the bill, graduate students would be required to pay tax on their college tuitions. (Currently, students are paid small stipends that offset the cost of tuition.)

If the House’s version is passed, students with low incomes would face huge tax bills, which could also drive fewer students to academia. Pharmaceutical companies that study and design drugs to combat rare diseases would also be affected by both versions of the tax bill. As it stands, these companies receive tax incentives to design these drugs (500 of which have come to the market, thanks to the incentives). The new bill would scale back the incentives, if not eliminate them altogether.

Regardless, as the tax bill continues to wind its way toward the White House, the future of health care remains as uncertain as it is certain to change.

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Paul Fuhr lives in Columbus, Ohio with his family and two cats, Vesper and Dr. No. He's written for AfterParty MagazineThe Literary Review and The Live Oak Review, among others. He's also the host of "Drop the Needle," a podcast about music and addiction recovery. More at You can also find Paul on Linkedin and Twitter.