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Concerns About Tax Bill’s Impacts on Virginia Health Insurance

The tax bill now being debated in Congress could have a major impact on Virginia health insurance. (Pixabay)
The tax bill now being debated in Congress could have a major impact on Virginia health insurance. (Pixabay)
December 11, 2017

RICHMOND, Va. -- In its current form, the U.S. Senate tax bill would raise health insurance premiums and force millions of people to lose access, according to a new analysis of federal figures.

Health economist Emily Gee with the Center for American Progress estimates nearly 300,000 Virginians would lose coverage over ten years. She said that's because the bill repeals the individual mandate, which now requires people to have insurance or pay a tax penalty.

Gee said without it, it’s estimated that annual premiums for a family of four would increase by more than $2,000 a year by 2019.

"If healthy people leave the insurance markets, that means that overall, the average person is sicker - insurers would need to raise premiums,” Gee said. "The Congressional Budget Office thinks that would be about a 10 percent increase over the next decade."

Congressional Republicans argue that repealing the individual mandate would permit people who want to, to go without insurance. Gee countered that some of them would end up costing the system more, by showing up uninsured in emergency rooms when they need medical care.

She said that kind of uncompensated care decreased under the Affordable Care Act, but could climb again if the tax bill passes. And she added treating the uninsured is an especially serious problem for smaller hospitals.

"Particularly in rural areas or areas where the hospitals are under a lot of financial strain, a big increase in demand for uncompensated care could be tough, or even devastating,” Gee said.

The Center also estimates that the bill would trigger nearly $550 million in cuts to Virginia Medicare payments next year, because of Congressional spending rules. Gee said the bill would increase the deficit enough to force $400 billion in Medicare cuts nationwide over 10 years.

"These cuts are automatic,” she said. "You wouldn't see Medicare necessarily mentioned anywhere in the tax bill. But it would, by law, these automatic cuts would go into effect starting in 2018."

The bill's supporters say Congress could decide to exempt Medicare from the cuts at a later date.

Dan Heyman, Public News Service - VA