Tuesday, November 21, 2017

House Passes Tax Reform; Senate Version Keeps Medical Deduction

The House passed sweeping tax overhaul legislation Thursday, shifting efforts to the Senate. The Senate’s tax bill differs significantly from the House version in numerous ways, including the medical expenses deduction, which remains intact in the Senate version.

The House passed the bill with 227 votes. Thirteen Republicans and all Democrats voted against the legislation. On the same day, the U.S. Senate Committee on Finance voted along party lines to advance a markedly different version of tax reform that includes a partial repeal of the individual mandate included in the 2010 health care law but does not touch the medical expense deduction.

AHCA/NCAL issued a press release last week opposing the elimination of the medical expense deduction, which many long term care patients use to offset the financial burden of receiving uncompensated long term or post-acute care.

The Senate version differs primarily because of procedural rules surrounding the budget reconciliation process. In order to avoid a Democratic filibuster, Senate Republicans are using the reconciliation process to pass legislation with a simple 50-vote majority. The process, however, ties lawmakers’ hands on issues of deficit spending, meaning the Senate bill necessarily must have more offsets or fewer revenue cuts than the House version in order for it to come to the floor.

In addition to procedural hurdles, the Congressional Budget Office (CBO) issued a report indicating that the Office of Management and Budget (OMB) would be forced to cut Medicare if tax legislation creates too much deficit spending. OMB would be forced to cut Medicare spending by $25 billion, or four percent of total spending. The House version of tax legislation is projected to increase the deficit by $1.5 trillion, according to the CBO.

AHCA/NCAL will continue to monitor the tax reform effort insofar as it affects its members and the patients they serve.

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