The Republican bill that overhauls the nation’s tax code makes one major change in health care that impacts everybody in Colorado — and leaves in place other health-related provisions that had been on the chopping block.
Here’s an explanation:
The bill eliminates the fine for not having insurance
The requirement that everyone have health insurance, known as the individual mandate, will remain. But the fine that people pay for not having insurance will disappear, starting in 2019, meaning there will be no government punishment if you don’t have insurance.
More than 126,000 Coloradans paid that penalty in 2015, to the tune of $60.6 million. But for many, the cost of paying the fine was less than the cost of insurance, according to a November report from the Colorado Health Institute.
Colorado’s record-low uninsured rate will likely go up
Colorado currently has a record-low rate of people without health insurance — about 6.5 percent. But doing away with the individual mandate means there could be 235,200 more people without insurance by 2025, according to an estimate by the liberal Center for American Progress.
Looking nationwide, the Congressional Budget Office has estimated that 4 million fewer people will have insurance in 2019 if the individual mandate goes away — and 13 million fewer by 2027.
Because many of those people, both in Colorado and nationally, would be eligible for federal tax credits to help them pay for health insurance, the CBO has estimated that the total federal deficit would drop by $338 billion between 2018 and 2027.
Some health insurance premiums will likely increase
All of the other provisions of the Affordable Care Act — like the bans on discriminating against people with pre-existing conditions or setting caps on how much care people can receive — will remain. So, those who opt to leave the insurance market are likely to be those who don’t have an urgent need for health care. With fewer healthy people in the pool to balance out the risks, premiums will likely rise for those who remain.
The CBO has estimated that, without the individual mandate in place, premiums will rise on average in the individual market by an additional 10 percent each year.
Tax deductions for medical expenses remain
While there were earlier discussions about doing away with the medical deduction, it stays in the final bill. But because the bill also raises the amount of the standard deduction, it is likely that fewer people will choose to deduct their annual medical expenses.
There was also early discussion about creating incentives for people to put money into health savings accounts. That didn’t make it in the final bill, though.
