How the Latest Tax Reform Bill Will Impact Access to Addiction Treatment and Recovery Services

December 6, 2017 | Addiction Policy Forum

On December 2, 2017, the U.S. Senate passed the Tax Cuts and Jobs Act (H.R. 1) along a party line 51-49 vote. Included in the legislation, which was approved by the full U.S. House of Representatives, is language repealing the Affordable Care Act’s (ACA) individual health insurance mandate penalty.

In a statement following the vote, Senate Finance Chairman Orrin Hatch said repeal of the mandate tax would give Americans, “the freedom to choose the best coverage for themselves and their families.” The unfortunate reality is that repeal of the individual mandate penalty could cause health insurance premiums to increase, making it less affordable for Americans, and more difficult for families and patients to afford addiction treatment and recovery services. Substance use disorder is a preventable and treatable disease in which people depend on affordable healthcare to seek treatment.

The ACA’s individual mandate calls for most U.S. citizens to have health insurance. This requirement is enforced by a penalty tax assessed to individuals at the end of each year if they fail to comply.Greater participation among healthier people ensures health insurance affordability for all Americans.

In a November 2017 report, the Congressional Budget Office (CBO), the nonpartisan government agency charged with providing budgetary assessments for federal legislation, found that should the individual mandate be repealed, “average premiums in the nongroup market would increase by about 10 percent in most years of the decade…” As a result, in 2019 four million people would be without health insurance and in 2027 the number would increase to 13 million. They also found that, “if the individual mandate penalty was eliminated but the mandate itself was not repealed, the results would be very similar to those presented in this report.” Consequently if less people purchase health insurance, there will be an increase in premiums that will hit hard on those suffering from chronic illnesses like substance use disorders.

To offset the impact of a full mandate penalty repeal, some Members have suggested legislation, like the Bipartisan Health Care Stabilization Act of 2017 (better known as the “Alexander-Murray bill”) to codify and continue Cost Sharing Reduction (CSR) payments through 2019. CSRs are payments by the federal government to insurance companies to keep insurance premiums lower than they would otherwise be, ensuring stability and affordability in the healthcare marketplace. While this legislation is certainly worthy of consideration and could be helpful to mitigate rising premiums, it’s ultimately a short term fix to what would be a long term problem if the individual mandate penalty were repealed.

Most recently, the House of Representatives moved to appoint House conferees to negotiate differences between the House-passed bill and the Senate-passed bill. The individual mandate penalty repeal may have passed in the Senate, but it is not too late for you take action and let Congress know why healthcare affordability is vital to so many of those in our nation who are suffering with substance use disorders. Call the House Republican conferees now and tell them to preserve the individual mandate penalty in tax reform negotiations with the Senate.  

House Conferees:

Rep. Kevin Brady (TX)

Rep. Devin Nunes (CA)

Rep. Peter Roskam (IL)

Rep. Diane Black (TN)

Rep. Kristi Noem (SD)

Rep. Rob Bishop (UT)

Rep. Don Young (AK)

Rep. Fred Upton (MI)

Rep. John Shimkus (IL)



Topics: Advocacy