Post 10: Tax Reform
This past week we heard a new Tax Plan Reform that the Senate and House are working on. As I was reading through my email, this email from HMFA popped up. In classes, we spent a ton of time talking about the differences between for-profit and not-for-profit organizations. This article talks about how repealing the individual mandate will affect health care organizations.
For for-profit, as well as non-profit, there are obvious factors that would hurt the organization. The drop in American's enrolled in private insurance and federal programs would drop by millions. This would affect the reimbursement rates and have premiums rise to help cover the costs of others uncompensated care. There are some more negatives such as changes in deductibles but this article actually points out the benefits that large for-profit hospitals would receive from this tax plan. Corporate tax rates will drop by 20 percent and will have 100 percent expensing of qualified property and capital expenditures (Daly 2017). These would cut costs for large for-profit hospitals leaving them with more money at the end of each year.
For the not-for-profit, the same repercussions of larger numbers of people being uninsured would also affect their cost shifting and coverage. They have other consequences they will face as well. There are issues with not being able to use refundable bonds, expanding unrelated business taxes, and creating new taxes (Daly 2017). If a non-profit hospital is not able to use tax-exempt bonds they may have an extremely hard time making new changes to improve their facilities.
The article ended saying that it is a bit too soon to see the exact impacts. Overall, I think tax reform and ACA reform is a scary thought for many healthcare organizations, both for-profit and not-for-profit. Although I do not really always enjoy reading about these things, and they are hard to understand sometimes, I have learned so much from the beginning of the year to know. Staying in the loop on how politics can affect healthcare is very interesting.
For for-profit, as well as non-profit, there are obvious factors that would hurt the organization. The drop in American's enrolled in private insurance and federal programs would drop by millions. This would affect the reimbursement rates and have premiums rise to help cover the costs of others uncompensated care. There are some more negatives such as changes in deductibles but this article actually points out the benefits that large for-profit hospitals would receive from this tax plan. Corporate tax rates will drop by 20 percent and will have 100 percent expensing of qualified property and capital expenditures (Daly 2017). These would cut costs for large for-profit hospitals leaving them with more money at the end of each year.
For the not-for-profit, the same repercussions of larger numbers of people being uninsured would also affect their cost shifting and coverage. They have other consequences they will face as well. There are issues with not being able to use refundable bonds, expanding unrelated business taxes, and creating new taxes (Daly 2017). If a non-profit hospital is not able to use tax-exempt bonds they may have an extremely hard time making new changes to improve their facilities.
The article ended saying that it is a bit too soon to see the exact impacts. Overall, I think tax reform and ACA reform is a scary thought for many healthcare organizations, both for-profit and not-for-profit. Although I do not really always enjoy reading about these things, and they are hard to understand sometimes, I have learned so much from the beginning of the year to know. Staying in the loop on how politics can affect healthcare is very interesting.
Daly, R. (2017, November 22). Tax Impacts to Differ at For-Profit, Not-For-Profit Hospitals. Retrieved November 29, 2017, from http://www.hfma.org/Content.aspx?id=57012
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