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CCTS Newsletter | November 20, 2017

Monday, November 20, 2017   (0 Comments)
Posted by: Andres Bachelet
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Dale Dirks and Dane Christiansen

November 20, 2017


Earlier this month, the House of Representatives passed the Tax Cuts and Jobs Act (H.R. 1). The comprehensive legislation represents an overhaul of the U.S. tax code, with a multitude of changes to tax brackets and deductions (including notable changes for non-profits, businesses, and individuals). Of concern to the healthcare community are provisions that eliminate the Orphan Drug Tax Credit, which has driven rare disease treatment development for decades. H.R. 1 also eliminates the itemized deduction for medical expenses that many individuals and families impacted by chronic diseases claim on an annual basis to help offset medical expenses. 13 Republicans joined their Democratic colleagues in opposing the measure, but their objections were primarily related to the fact that constituents in the Northeast are slated to see a tax increase under the structure advanced by the House.  


The Senate Finance Committee followed the House’s action by approving its version of the Tax Cuts and jobs Act after nearly a full week of highly partisan deliberations. The version ultimately reported out by the Finance Committee has significant differences from the House-passed bill. Most notably, the legislation repeals the Affordable Care Act’s individual mandate to purchase insurance, thus pulling out a foundational principle of the current healthcare system. The Congressional Budget Office (CBO) has reported that, if adopted, the elimination would result in approximately 13 million Americans losing health coverage. Key stakeholder representing insurance, hospitals, physicians, and patients have written to congressional leaders to express deep concerns that this action would destabilize already sensitive insurance markets. The Senate proposal does not eliminate the Orphan Drug Tax Credit, but it reduces its overall generosity and applicability substantially.


Now that the Senate bill has been reported out by the Finance Committee, it is awaiting consideration by the full Senate. Passage and a subsequent conference with the House to craft a final measure are not guaranteed though. A handful of Republican Senators have expressed reservations about various parts of the Senate plan. Further, with the potential loss of one Republican vote due to the December 12th special election in Alabama, there is a palpable sense of urgency among party leaders that may further complicate the bill’s prospects.