OK, a bit of hyperbole – but only a bit.
Here’s how the Trump Tax Bill will affect healthcare…
- Immediate $25 billion cut in Medicare spending followed by a total of $400 million over the next nine years
This has to happen under “PAYGO” rules which require offsets in spending when revenues are cut (as will happen under the Trump Tax). Medicare is NOT AN ENTITLEMENT, it is an EARNED benefit. Starting January 1, 2018, doctors, hospitals, and pharma are going to take the hit as Medicare will stop paying for some care delivered by doctors.
- 13 million (+/-) more people will lose health insurance
If you can sign up AFTER you get sick, why would you pay premiums until you need insurance? The bill ends enforcement of the mandate, but insurers are still REQUIRED to take all comers. So, many younger and healthier people will not sign up, and when they don’t the “pool” of insured people will get older, less healthier, and therefore more expensive to insure.
- Individual health insurance premiums will go up about 10%
So, Insurance companies will raise premiums by about 10% as healthcare costs for the older, less healthy population will go up.
- Drive insurers out of the individual and small group markets
- Reduce drug development for “orphan” diseases
Today pharma gets a major tax break for developing treatments for orphan diseases, such as cystic fibrosis, epilepsy, muscular dystrophy and Angelman syndrome. It appears that tax break goes away – and this will greatly reduce R&D. The tax credit has been cited as responsible for treatments for about 350 diseases; there are around 7000 in total. Here’s one pretty amazing success story that will likely not be repeated due to the end of the tax credit.
With fewer people covered by insurance, and higher rates for those that are, we’re likely to see more insurers drop out of more markets.
The greatest impact will be seen several years down the road, when the overly-optimistic growth projections prove to be just that. Already, experts predict the Trump Tax Bill will add over a trillion dollars to our national debt. When that happens, there are going to be calls for massive cuts to ALL services – including Social Security, Medicare, and Medicaid.
What does this mean for you?
I’m thinking Medicaid for all by 2027.