Tax Reform Bill Expected to Be Signed Into Law

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The package of tax reforms expected to be signed into law includes several provisions that will impact some people with cystic fibrosis.

Published on December 21, 2017

In the coming days, President Donald Trump is expected to sign the Tax Cuts and Jobs Act into law. The reforms will impact both tax and health care policy. The new law would enact the following provisions that could impact people with cystic fibrosis:

  • Repeal the individual mandate, which requires that most people get health insurance through either a public or private insurer. According to the nonpartisan Congressional Budget Office (CBO), removing the individual mandate will cause health insurance premiums to increase by 10 percent over the next decade -- making health insurance less affordable for some people with CF. This provision would take effect starting Jan. 1, 2019.

  • Expand the medical expense deduction, which helps people with CF and their families afford the cost of their care. Although most people with CF have insurance, they often face high deductibles, copays, coinsurance, and out-of-pocket costs for insurance. This deduction, which would expand in the Tax Cuts and Jobs Act, would allow individuals or families to write off qualified medical expenses that exceed 7.5 percent of their income from their taxes. This provision would be effective for taxable years beginning Jan. 1, 2017. The threshold would rise to 10 percent for taxable years starting on Jan. 1, 2019.

  • Weaken the orphan drug tax credit, which incentivizes small biotechnology companies to pursue treatments for diseases like CF that affect small populations. While the CF community has seen progress in treating the disease, there is still much work to be done to improve upon current treatments and develop new therapies. Many of the companies pursuing these treatments use this tax credit to offset the high costs of drug development. Under this new law, drug companies would be able to claim a credit equal to 25 percent of their clinical testing expenses when researching rare diseases, instead of 50 percent. This provision would be effective for taxable years starting on Jan. 1, 2018.

The Cystic Fibrosis Foundation will continue its advocacy on behalf of people with CF and their families to ensure that those living with the disease have access to the high-quality, specialized care and innovative treatments they need to stay healthy. 

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