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Tax-Reform Legislation Could Have 'Catastrophic' Effect on Health Care, ACP Warns

College works to protect physicians, patients and medical students from significant cuts

Dec. 1, 2017 (ACP) -- As tax-reform bills work their way through the House and Senate, the effect they could have on health care for millions of Americans could be devastating, warns the American College of Physicians.

"The Republican leadership and the president are championing tax-reform legislation that will hurt both patients and physicians in a very significant way," said Bob Doherty, ACP's senior vice president for governmental affairs and public policy. "We're deeply concerned about the catastrophic effects of the bills in both the House and the Senate, and we have been marshaling our resources to push for a better path forward."

The House passed its tax legislation Nov. 16 by a vote of 227 to 205, with 13 Republicans joining all Democrats to vote no. The bill, which runs for more than 400 pages, calls for $1.5 trillion in tax cuts.

Two provisions are especially concerning to ACP: elimination of the tax deduction for high medical expenses and elimination of the tax deduction for student loan payments.

Killing the medical expense deduction -- which allows taxpayers to deduct expenses that go beyond 10 percent of their income -- would have "a catastrophic impact on the sickest people in the United States," Doherty said.

Advocates say that many taxpayers will gain through tax cuts elsewhere. Critics are not convinced.

Almost 9 million people took advantage of the deduction last year, according to a New York Times report. It said the deduction would cost the federal government an estimated $10 billion next year if it were to remain in place.

However, "eliminating the deduction could hasten the speed at which some older Americans spend down their savings and have to go on Medicaid," The Times reported, noting that that would be "a far greater expense for the federal government."

ACP also is concerned about the potential elimination of the deduction for student loan payments. As Doherty noted, medical students already graduate with an average of a quarter-million dollars in debt.

"If this deduction is eliminated, they'll be paying even more than they're paying now," he said. "That's an unacceptable burden."

The Senate's tax-reform bill -- which has yet to face a final vote but seems likely to pass -- doesn't include eliminating these two deductions, Doherty said.

However, the Senate version would eliminate the individual insurance mandate created by the Affordable Care Act.

"Premiums would go up an average of 10 percent each year, and as many as 13 million people would lose coverage, according to estimates," Doherty said.

In addition to these issues, ACP sees other problems in the tax-reform bills.

"We're also concerned that neither the House nor Senate bill pay for themselves, so they'll increase the federal budget deficit by trillions of dollars," Doherty said. That would cause automatic cuts in Medicare to kick in, which would directly affect clinicians.

"There would be a 4 percent cut in the payment to physicians and other providers," he said.

"We have written to the Senate saying we cannot support tax reform that would cause millions to lose insurance coverage and drop out of the market plus result in cuts to Medicare," Doherty said.

If the Senate passes its tax-reform bill, it would move forward to the White House if the House accepts the Senate's version or the two bodies reach an agreement on changes. The president is expected to sign any tax-reform bill that crosses his desk.

"We're focused like a laser on the provisions that affect health care," Doherty said. "We have been in direct touch with our elected leaders as an organization, and our members have conducted outreach individually."

"We are doing everything we can to protect patients and physicians," he said.

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