New tax plan will hinder care for older Americans

We believe that the House GOP tax plan disproportionately benefits the wealthy and big corporations. Now it’s evident that older Americans with serious or chronic health conditions will be helping to pay for those tax breaks.

That’s because the Republican tax plan eliminates the deduction for medical expenses that nearly 9 million people have used to offset high out-of-pocket costs for care. The ranking member of the Senate Finance Committee, Senator Ron Wyden (D-Ore.), labeled the repeal of this tax deduction “anti-senior.”

Some 75 percent of Americans who claim the medical expense deduction are 50 or older. Older Americans typically require more medical care and disproportionately suffer from chronic illnesses. They use the medical expense tax deductions not only for co-pays and co-insurance, but for long-term care in nursing homes or in their own homes. Nursing home and in-home care can cost tens of thousands of dollars a year. The medical expense deduction helps offset the taxes seniors owe on their retirement savings distributions.

{mosads}Current tax law permits deductions for preventive care, treatment, surgeries, dental and vision, and long–term care which exceed 10 percent percent of an individual’s adjusted gross income for the year. According to Money magazine, individuals are not only allowed to deduct their own expenses, but “those of their dependents, which includes aging parents who live with the individual and meet other criteria.”

Because the majority of those claiming medical expenses have incomes of $75,000 or less, snatching away this tax deduction will have one of three results. No longer able to afford the medical services or long-term care they need, these patients will be forced to:

1. Forgo needed medical care
2. Rely on family members to exhaust their own savings; or
3. Impoverish themselves to qualify for Medicaid

None of these scenarios is desirable or fair, and cannot be justified in the name of giving billionaires and big corporations massive tax breaks. If, in fact, millions of older Americans unable to afford long-term care after their medical deductions impoverish themselves sooner in order to qualify for Medicaid, that will place an enormous strain on the program itself. Given that GOP leadership has already proposed to slash $1 trillion from Medicaid, the consequences could be especially devastating.

Long-term care advocates are already sounding alarm bells about the tax bill McKnight’s reports that the American Health Care Association, the National Center for Assisted Living, and Leading Age (among others) warn that proposed changes in the tax code cut could force providers to curtail services or close up shop altogether. If anything, they say, Congress should look for ways to make long term care “more accessible and affordable for the millions of seniors and individuals with disabilities who depend on it.” This tax plan does the opposite.

The elimination of the medical expense deduction is, in fact, a double whammy for older Americans, because the Republican budget resolution also calls for deep cuts to Medicare (nearly $500 billion), likely to be achieved by privatizing the program and raising the eligibility age to 67. What’s more, by blowing a $1.5 trillion hole in the deficit to pay for their tax giveaways to the wealthy and powerful, the GOP is setting up a scenario justifying further raids on Medicare, Medicaid and Social Security in future years to close the gap.

Repealing the medical expense deduction is symptomatic of the overall problem with the GOP tax and budget plan. It’s a boon for corporate lobbyists and wealthy donors and bad medicine for everyone else.

Max Richtman is president and CEO of the National Committee to Preserve Social Security and Medicare, a membership organization which promotes the financial security, health, and well being of current and future generations of maturing Americans.