This week the House Ways & Means Committee will begin debating the recently released Republican plan to reform the tax code. Read here for more information on what’s in the bill. While explicit cuts to Medicaid are notably absent from the current bill, advocates remain worried that Medicaid will be used at a later date to pay for the up to $1.5 trillion deficit that tax reform may incur as outlined in the reconciliation instructions. For more information about this possible scenario, see this budget brief from the Center on Budget & Policy Priorities.
While no provisions that are directly related to the Medicaid and Affordable Care Act are in the bill, President Trump has advocated for ACA repeal within the tax plan and this past weekend Speaker Ryan shared that they are looking into it. Further, ANCOR has noted some additional potential impacts to issues of relevance to providers that do exist in the bill that we will continue to monitor including:
- Changes to unrelated business income expenditures (UBIT);
- Definitions of disability which ANCOR and changes to credits that support disability issues;
- Changes to charitable tax deductions – which do not seem harmful but need reviewing;
- Increases to child tax credits, which is important for families with adult dependents with disabilities. However, ANCOR is alert to the fact that the medical expense deduction is being used as a pay for. This is concerning because many individuals count on that deduction to help offset LTSS expenses.
While it appears that Congress is currently focused on tax reform paying for itself, ANCOR staff remain vigilant that the extent of the tax cuts being proposed could be so large as to put pressure on the federal budget and lead to indirect Medicaid cuts and caps.
Please stay tuned for further communications from ANCOR as we complete our review of the tax reform bill and what it means for you.