Busy Weekend: Tax Bill Reaction, CVS & Aetna
Published: Sunday, December 31, 2017 12:01 am
The first weekend of December was a busy one as the Senate passed tax reform and CVS and Aetna announced a planned merger.
The U.S. Senate has passed their version of tax reform, which includes a repeal of the individual mandate to purchase insurance that is part of the Affordable Care Act. Over the coming days, the Senate and House of Representatives will be engaged in meetings to address the differences between the two versions of the bill, with a hope of having something to sign on the president's desk before the end of the year.
Reaction from various organizations has begun coming in as healthcare stakeholders review provisions of the Tax Cuts and Jobs Act of 2017.
Rick Pollack, President & CEO of the American Hospital Association:
We are pleased that the Senate bill did not eliminate the tax-exemption for private-activity bonds for not-for-profit hospitals, protecting hospitals' and health systems' access to this vital source of low-cost capital. This important tool helps provide hospitals with much-needed capital in a cost-efficient manner to modernize facilities to enhance and expand patient care and access. Unfortunately, at the same time, the bill would eliminate hospitals' ability to execute tax-exempt advance refundings of outstanding tax-exempt bonds, an important means for reducing hospital borrowing costs. In addition, we are glad that the bill did not eliminate medical expense deductions for people with high medical costs and instead lowers the threshold for medical expense deductions from 10 percent to 7.5 percent for two years.
We are also disappointed that the tax legislation passed with a provision that would eliminate the individual mandate, which would result in the loss of health insurance coverage for millions of Americans. The goal of the ACA was to extend coverage and, as a result, millions have benefitted from access to needed care. We must protect that access to care for those who need it and ensure the most vulnerable patients are not left behind.
CVS & Aetna
On Sunday, Dec. 3, CVS announced plans to purchase Aetna for more than $75 billion in cash and debt assumption.
In a release from CVS Health, officials said, "This transaction fills an unmet need in the current healthcare system and presents a unique opportunity to redefine access to high-quality care in lower cost, local settings whether in the community, at home, or through digital tools."
Officials also said the move is a "natural evolution" for both companies as CVS has already moved beyond retail pharmacy to become an integrated healthcare company, and Aetna has moved beyond traditional insurance coverage to focus more strongly on customer well-being and preventive strategies.
The proposed transaction is subject to customary regulatory review.
The full release is available here.