Advocacy groups try to save medical-expense deduction
WASHINGTON — The medical-expense deduction targeted for repeal by GOP tax writers has helped to offset costs including nursing home care and fertility treatments, laser eye surgery and travel out of state for a second opinion on a rare cancer.
Several million people unlucky enough to face big medical bills not covered by their insurance would lose a valuable deduction under the House GOP bill. Groups representing older people and patients are trying to save it.
“Anybody who is paying for the cost of nursing home care is paying a great deal of money, and they are going to lose that deduction, and their taxes are going to go up,” said Thomas DeCoursey, a retired lawyer from Kansas, in his 70s.
He relies on the deduction to help offset costs associated with nursing home care for his wife, who has Alzheimer’s. Some of his own medical expenses also factor in. DeCoursey estimates that in a couple of years their annual costs will pass $100,000.
“There are a lot of people in my shoes,” said DeCoursey, who lives in Leawood.
About 9 million households — 6 percent of tax filers — claim the medical-expense deduction, said Gordon Mermin, a senior researcher at the nonpartisan UrbanBrookings Tax Policy Center. The annual cost to the U.S. Treasury is about $10 billion, which ranks it as a modest tax break. Those who benefit tend to be middle-income and upper-middle-income people.
In addition to nursing home care, not generally covered by medical insurance plans, the medical-expense deduction can be used for:
Transportation expenses to a top hospital, like a comprehensive cancer center.
Some long-term-care insurance premiums.
Installing specialized medical equipment in a patient’s home or vehicle. Dental procedures. Bills from out-of-network doctors.
House Republicans defend their approach.
Ways and Means GOP spokeswoman Lauren Aronson said the bill would allow people to “keep more of the money they earn for expenses that arise throughout their lives — such as medical bills — rather than providing a myriad of provisions that many Americans may only use once in their lifetimes, and only if they go through the hassle and frustration of itemizing.”
Republicans say the lower tax rates and higher standard deduction in the GOP bill would compensate for the loss of particular tax breaks.
An argument against the medical deduction is that it can’t be easily claimed. Taxpayers have to have enough deductions to itemize in the first place.
Democrats have jumped on the issue, arguing that the medical-expense deduction would be sacrificed to reduce taxes for the wealthy.
In other news Tuesday regarding the House GOP tax bill:
An influential conservative congressman predicts “there’s no way” the House tax bill will include a repeal of a mandate in President Barack Obama’s healthcare law that individuals buy health insurance. But North Carolina Republican Mark Meadows, chairman of the Freedom Caucus, said House Republicans would gladly embrace the idea if the Senate were to add it.
The Republican-led House Ways and Means Committee on Tuesday beat back Democratic efforts to keep the tax break for people paying state and local levies.
The restrictions on the state and local deductions in the GOP tax plan have angered Republican lawmakers from high-tax states like New York and New Jersey.