During November 2017, the House of Representatives passed its version of the Tax Cuts and Jobs Act
. The comprehensive legislation represents an overhaul of the U.S. tax code, with a multitude of changes to tax brackets and tax rates. The Senate passed a differing version of legislation overhauling the tax system on December 2, 2017. Both proposals have extensive detail and include a number of provisions that alter specific deductions and credits.
While moderate Senators received assurances that drastic changes to healthcare coverage and access would not be included in a final tax package, there are some health items up for negotiation as lawmakers move to conference in an effort to craft the compromise bill. The Senate tax plan currently includes a provision eliminating the Affordable Care Act’s
individual mandate to purchase insurance or pay an annual penalty. No such provision was included in the House bill, but the requirement is expected to be popular with House members in the majority. The House tax plan includes a provision eliminating the medical expense deduction (which many families use to offset the cost of chronic or complex care). Finally, the House bill eliminates the Orphan Drug Tax Credit incentivizing treatment development for rare diseases while the Senate bill simply reduces the generosity of the credit substantially. Lawmakers will need to reconcile the differences between all of these health provisions as they craft the final tax package, which is expected to be sent to the president just ahead of the upcoming congressional recess (scheduled to occur prior to December 24).
With so much energy dedicated to tax reform, Congress has been unable to advance final funding measures for FY 2018 and the House has proposed enacting a Continuing Resolution (CR) to keep all federal programs operating at FY 2017 levels until December 22, 2017. It is likely that a subsequent CR may be needed to extend FY 2017 funding levels into January before the final FY 2018 appropriations bills can be completed. In addition to increasing funding for many important medical research and patient care programs, the Committee Reports accompanying both the House and Senate FY 2018 Labor-Health and Human Services Education appropriations bills include language calling on the Centers for Medicare and Medicaid Services (CMS) to further explain how the agency is taking steps to limit fraud and abuse in electrodiagnostic (EDX) medicine and improving patient care. The language further comments that utilization rates for EDX testing continue to increase (despite the CMS goal of lowering utilization and generating savings). Congress will need to finalize the FY 2018 spending bills in a timely fashion to facilitate CMS responding to these concerns through the administration’s FY 2019 budget request to Congress.