Are the GOP Tax Reform’s Effects on Healthcare Positive or Negative?
As we approach the holiday season, healthcare and taxes debates between Republicans and Democrats have picked up steam.
If you don’t keep up with the turmoil surrounding Republicans’ attempts to pass a sweeping, you should. Because the new tax legislation could have tremendous effects on the healthcare laws in the U.S.
After reviewing the GOP tax reform closely, our Fort Lauderdale tax attorneys at Zuckerman Law, L.L.C. have estimated what the tax legislation would mean for America’s health care system and for insured and uninsured U.S. citizens.
Eliminating fines for not buying insurance
After their failed attemptы to pull the heart out of the Affordable Care Act (Obamacare) with the healthcare overhaul in recent months, Republicans are now determined to pass a tax reform that would have a direct effect on Obamacare.
The GOP tax reform calls for the repeal of the individual mandate, which requires uninsured U.S. citizens to either buy health coverage or pay a fine on their taxes for choosing to remain uninsured. The individual mandate has been the central pillar of the health care act.
If the provision to repeal the individual mandate remains in the final bill, the Republican tax reform would not technically eliminate the requirement for Americans to get insured. Instead, it would drop the fine U.S. citizens would pay for not buying insurance.
Our tax attorneys remind readers that the individual mandate allows to make U.S. health care more available and affordable to everyone, including those who are sick and would require more costly medical attention than healthy Americans.
Under Obamacare, every U.S. citizen is required to sign up for the health-care act – even those who would not need health insurance in the coming years or decades. Having young and healthy Americans onboard helps reduce the costs of providing insurance coverage for citizens who are more likely to face costly medical bills.
Health insurance premiums would go up
Abolishing the fines and overhauling the individual mandate requirement would result in 13 million fewer Americans having insurance over 10 years, according to estimations by the Congressional Budget Office.
This, in turn, could bring premiums up by roughly 10% every year. Our tax lawyers here at Zuckerman Law, L.L.C. explain that this would be one of the aftereffects of the individual mandate repeal, which is expected to prompt millions of Americans to drop insurance and, as a result, leave insurance companies no choice but to increase premiums to compensate for more at-risk customers.
Removal of the medical expense deduction
Although the medical expense deduction is used by fewer than 9 million insured Americans, this could still make a difference for their budgets. The GOP tax reform calls for removal of taxpayers’ ability to deduct medical expenses that exceed 10% of their adjusted gross income.
Cuts to Medicare
Even though the tax reform doesn’t target Medicare directly, it could trigger a domino effect that would eventually bring major cuts to the program. Since Medicare reductions are regulated by the Pay-As-You-Go Act of 2010, cuts to the program would be limited to 4% of spending (about $25 million of the overall spending).
All in all, our Fort Lauderdale tax attorneys predict that many insured Americans, especially the sicker groups, would be affected by the GOP tax legislation if it’s approved and signed by the U.S. President Donald Trump. For some, higher insurance premiums would be unaffordable.
Here at Zuckerman Law, L.L.C., we consult our clients about how the new tax reform would affect their lives directly and, in many cases, advise them to take certain actions in order to be better prepared until the new legislation comes into effect (to soften the blow, so to speak).
Concerned about the GOP tax reform? Talk to our experienced tax attorneys in Fort Lauderdale and across Florida – by calling at 754-201-3536 or fill out this contact form. We offer a free initial consultation.