Now that the Republican Tax Plan will soon be the law of the land, its health care provisions offer a challenge to the health care industry both explicitly and indirectly. As we await the final version of this new legislation, here are some changes to expect that could affect home care agencies according to The National Law Review.
Reduction in Medicare Spending
The new Tax Plan is expected to significantly grow the federal deficit. Due to the 2010 “pay as you go” law, this will force mandatory cuts to many programs, including Medicare. According to the CBO, Medicare would be required to immediately reduce their spending by 4 percent annually. This is a loss of $25 billion to the health care system during the first year, which will have ramifications across the entire industry.
Elimination of the Medical Expense Tax Deduction
Currently, tax filers who itemize their deductions have been allowed to deduct medical expense that go above 10 percent of their income. The House bill seeks to eliminate this deduction while the Senate version plans to keep this deduction and lower it to 7.5 percent for 2017 and 2018 medical expenses. It’s possible that once the joint bill is finalized that this deduction will be eliminated. This will be costly for families who have high out-of-pocket medical expenses. Home care agencies are likely to see a decrease in patients.
Additional Changes to Expect
Repealing the individual mandate is expected to raise premiums and make health insurance even less affordable for many patients. State budgets are expected to suffer under pressure from taxpayers seeking property tax relief as deductions for residential property taxes will be capped at $10,000. This is expected to result in less money for Medicaid payments and will directly affect health providers that rely on Medicaid payments.
Whatever changes are happening in Washington, your agency needs to control costs, avoid audits, and manage billing efficiently. Request a DCI software demo today.
Categorised in: Industry News
This post was written by admin