$1.5 Trillion Tax Plan Heads to White House for Signature

Bruce E. Johnson, MD

The consolidated tax bill that now goes to President Trump’s desk for a signature carries with it dire warnings from oncology interest groups that access to care will suffer under the federal spending cutbacks that are expected to result. The bill has moved like a juggernaut through both houses of Congress despite hefty opposition from Democrats and many healthcare organizations.

“We are deeply concerned about the sequestration cuts that would be triggered by passage of the Tax Cuts and Jobs Act,” ASCO President Bruce E. Johnson, MD, said in remarks earlier during the legislative process.

Following revisions to the Senate version of the spending bill, which was passed 51 to 48 early Wednesday morning, House lawmakers approved the $1.5 trillion package by a vote of 224 to 201. The bill reduces the corporate tax rate to 21% from 35%, lowers individual taxes for many—though not all—and reduces inheritance taxes. The bill would also cap potential deductions in state and local taxes on federal tax returns.

It has been billed by supporters as an economic stimulus that will entice corporate entities to relocate their offshore funds to the United States, boost investment, and increase hiring.

Among objections raised by members of the oncology community is that the tax reductions will necessitate a sizeable reduction in Medicare spending.

“If the deficit is increased, existing law requires automatic cuts to mandatory programs,” Johnson said. “The tax reform legislation under consideration will almost certainly trigger cuts to Medicare, projected to be a $25 billion reduction in 2018. Sixty percent of cancer patients are Medicare beneficiaries. A cut of this magnitude will cause increased instability in an already fragile cancer care delivery system and threaten access for patients with cancer.”

The termination of the individual mandate for insurance coverage, which would take effect in 2019, would likely prompt healthy individuals to exit the health exchanges that have enabled many sick and economically struggling people to obtain coverage. Without that revenue, payers are expected to raise their premiums, causing additional hardship for those who need coverage and pushing the exchange system further toward collapse, according to critics of the tax legislation.

Many healthcare groups had urged Congress to keep the insurance requirement, saying too many individuals would be saddled with high premiums they cannot afford. Those groups include the American Diabetes Association, the American Heart Association, the Cystic Fibrosis Foundation, the Arthritis foundation, the March of Dimes, the National Multiple Sclerosis Society and the advocacy arm of the American Cancer Society.

Republican proponents of the bill have contended that the individual mandate represents an intrusion by the federal government into individual rights of freedom. They have disagreed with Congressional Budget Office analyses of the spending bill that suggest it would create an unwieldy deficit that would burden Americans for years to come.

They have also styled the bill as a first stage in a strategy to impose significant cuts on a healthcare system that has been largely unable to bring rising costs under control.

The Community Oncology Alliance had joined the chorus of healthcare opposition to the tax bill, calling the measure a “budget gimmick that will have a very real and dangerous impact on cancer care in the United States.”

For members of the independent oncology clinic association, dramatic changes in Medicare spending and public access to care threaten viability in a landscape that has been increasingly precarious in recent years. According to COA, 91 cancer treatment centers have closed since a sequester cut was imposed in 2013. Another 130 have merged with hospitals, a move that COA contends has contributed to the rising costs of care, as hospital centers charge higher rates to cover their greater overhead costs.