In recent months, both Congress and the media have been fixated on tax reform. Congress just passed the first tax reform bill in thirty years. So, after the Christmas break, maybe they can return to the problem that is foremost in the minds of Americans, our failing healthcare system.
While the tax bill did repeal the coercive penalty for failure to purchase insurance, Americans still face two huge healthcare problems: they can’t get care when they need it and they cannot afford health insurance. And paying for the care itself is beyond everyone’s reach, except for uber-rich.
In fact, while everyone wants relief from the tax burden, a recent Politico-generated survey shows that healthcare is still the No.1 domestic concern for both Republicans and Democrats.
{mosads}And though almost all Americans will see gains from the tax bill, ObamaCare will consume those benefits rather quickly.
The GOP tax reform bill includes a long overdue reduction in the corporate tax, bringing the U.S. in line with other countries. This will restore our competitiveness and bring jobs as well as capital back to this country. Reductions in tax rates, closure of loopholes, elimination of the death tax, and increased family deductions will put more money in the wallets of all Americans. Extension of the 529 education savings accounts will put more control in the hands of parents with school-age children.
These are all good things both in the short-term as well as the long view. The more people who have jobs, the fewer who are on welfare. When parents have more school choice, children will get better educations. As more people have gainful employment and keep more of their hard-earned dollars have money in their pockets, they will prosper.
As a result of of this tax reform, people will be less dependent on government and our nation will flourish. But, healthcare remains as a major drag. Here’s how.
Sen. Mitch McConnell (R-Ky.) predicted that the GOP tax reform bill would cut $2,200 from the average family’s taxes. This is very good news, just not good enough. Why? Because the rise in family spending on healthcare is almost triple the tax cut.
Health insurance that was unaffordable before ObamaCare has become even more expensive as a result of the self-proclaimed Affordable Care Act. In 2008, the average employer-sponsored family health plan cost $12,680. By 2016, the premium cost alone had increased 50 percent to $18,142. And ominously, premiums are set to rise an additional 34 percent, an additional expenditure of $6,168, starting in 2018.
In other words, the average family will spend $6,168 more next year for healthcare because the ObamaCare mandates remain in force. So, even though the family will gain $2,200 from tax reform, they will still have $3,968 less in their pockets because Congress failed to repeal ObamaCare.
ObamaCare is largely a tax bill, with twelve new taxes and four existing taxes that were increased. Though the GOP tax reform will reduce tax rates across the board — a good thing for all — it does not eliminate ACA’s crushing burden on taxpaying Americans.
Conservatives oppose Obamacare because it harms Americans two ways: in their health and in their wallets. Those who point to the increase in the number of insured Americans fail to mention the concurrent decrease in access to care. Evidence of medical harm by the ACA and its Medicaid mandates include: unnecessary deaths in Illinois, longer wait times nationally to see a family physician, and worse surgical outcomes in Medicaid-covered patients than those with no insurance at all. The evidence of financial harm is equally obvious, both by the increased tax burden and the doubling of healthcare costs.
While the overhaul of the tax code will let Americans keep more of their hard-earned money and will encourage job creation, the benefits are less than satisfactory as long as the ACA remains intact and hurtful.
Dr. Deane Waldman, MD MBA, is director of the Center for Health Care Policy at the Texas Public Policy Foundation.