The Republican tax reform bill released Thursday would eliminate tax breaks that help chronically ill people and drug makers developing treatments for rare diseases.
The legislation includes several provisions targeting different aspects of healthcare. It would eliminate a tax break for research on rare disease treatments and kill a deduction on out-of-pocket medical expenses.
Currently, a taxpayer can claim a deduction for medical costs for himself, a spouse, or a dependent if those expenses are higher than 10 percent of adjusted gross income.
The bill would repeal the tax deduction after 2017.
Some experts say the people who use the deduction the most are the chronically ill.
“Don't forget long-term care expenses, which are deductible under the medical expense deduction for people who are chronically ill,” tweeted Larry Levitt, senior vice president of the Kaiser Family Foundation.
The tax cost of the deduction is roughly $10 billion per year, according to the Treasury.
The legislation also hits the pharmaceutical industry, specifically those that make drugs to treat rare diseases.
A drug maker currently can claim a tax credit equal to 50 percent of clinical testing expenses. The bill would repeal that tax credit for certain drugs that treat rare diseases.
The GOP estimates the repeal would boost revenue by about $54 billion over 10 years.
But the elimination comes after Congress made several moves to entice drug makers to create drugs to treat rare diseases, which aren’t profitable for them.
The Biotechnology Innovation Organization, which represents biotechnology companies, gave a muted statement on the tax bill. It said that the group would work with lawmakers to maintain the tax credit.