NAMI Advocacy: Tax Reform Update

On Dec. 4th, the House voted to go into conference committee with the Senate to negotiate a compromise between the differing House and Senate tax reform bills. When an agreement is reached, both chambers will vote on the final bill. If the bill passes both the House and Senate, it will go to the President for his signature or veto.

How the tax bills could hurt people with mental illness:

  • Increasing the cost of health insurance. The Senate bill eliminates the tax penalty for not having health insurance, which effectively ends the Affordable Care Act’s individual mandate. The non-partisan Congressional Budget Office (CBO) estimates that this would increase the number of uninsured Americans by 13 million by 2027. With fewer (mostly healthy) people insured, premiums will increase—making insurance less affordable for people with mental health conditions.
  • Reducing incentives to develop affordable housing. The House bill includes language that may hurt the supply of affordable housing for people with serious mental illness. Repeal of the tax exemption on private activity bonds (PABs), coupled with reductions in the corporate tax rate, will stifle housing development and result in 950,000 fewer units of affordable rental housing, according to the National Housing Trust. This will cause even greater challenges for people with serious mental illness who rely on Section 811 housing.
  • Ending the tax deduction for medical expenses. The House bill includes a repeal of the medical expense deduction, which allows people to deduct medical expenses that exceed 10% of their adjusted gross income. Eligible deductions can include payments for: visits with psychiatrists, psychologists or therapists; inpatient psychiatric and substance use stays; transportation to mental health treatment, and; mental health medications. Repealing this deduction will harm people, including people with serious mental illness, who have very high medical expenses.

There’s more. The Congressional Budget Office estimates this tax bill will increase the deficit by $1 trillion over 10 years. That could increase the chance that Congress will choose to reduce this deficit by cutting other programs in 2018, such as Medicaid, the largest payer of community mental health services and supports for children and adults with mental illness.

Tell your Members of Congress that tax reform shouldn't hurt people with mental illness. But current tax reform proposals do. They will increase the cost of health insurance and reduce the development of affordable housing. #Act4MentalHealth