Larson: Families Dealing with Large Medical Expenses Shouldn’t be Further Burdened
Washington, D.C. – During the third day of the Ways and Means Committee Mark-Up of the Republican Tax Plan, Rep. John B. Larson (CT-01), offered an amendment to add back the critical Medical Expense Deduction. Under current law, taxpayers who itemize can deduct medical expenses that exceed 10 percent of their income. The Republican Plan eliminates this. Larson’s amendment would add back the deduction, and lower the threshold to 7.5 percent of income. The amendment failed in Committee with a vote of 24-16.
Watch Rep. Larson’s remarks on this amendment here.
“The elimination of the Medical Expense Deduction would be cruel. The 8.8 million taxpayers that depend on this deduction are already suffering through hard times, why would we want to further burden them more and eliminate this deduction? My amendment adds this critical deduction back, and lowers the threshold to 7.5 percent of one’s income. We should be working to help make these Americans’ lives easier, not more difficult. Many of the Americans using this deduction are seniors in need of long-term care, or parents raising a special needs child with complex health conditions. In Connecticut alone, 116,390 people claimed this deduction, averaging $11,114 in qualified medical expenses. The elimination of this deduction would result in a $1.6 billion hardship for Connecticut taxpayers at all levels. I’m disappointed that my Republican colleagues have chosen to give corporations and the wealthy a tax break, rather than help sick Americans and their families,” said Larson.
Additionally the following groups wrote to Larson to oppose the elimination of the Medical Expense Deduction. Please see their letter below.
We, the undersigned organizations write today to express our opposition to elimination of the Medical Expense Deduction in H.R. 1, the Tax Cuts and Jobs Act of 2017.
For the past 75 years, Americans with high health care costs have been able to deduct medical expenses from their taxes. For the approximately 8.8 million Americans who annually take this deduction, it provides important tax relief which helps offset the costs of acute and chronic medical conditions for older Americans, children, pregnant women and other adults as well as the costs associated with long term care and assisted living. Medical expenses that qualify for this deduction can include amounts paid for prevention, diagnosis, treatment, equipment, qualified long-term care services costs as well as long term care insurance premiums. Low and middle-income families and individuals with significant disabilities face a constant stream of deductibles and high co-pays, and also pay out-of-pocket for various services and devices that enable the individual to live a productive life in the community.
In addition, the medical expense deduction- with a threshold based on a percentage of income- is truly middle class tax relief. According to 2014 estimated IRS data:
- 6.3 million (69%) of those claiming the deduction reported income of $75,000 or less;
- 4.5 million (49%) of those claiming it reported income of $50,000 or less;
- 55% of all households claiming the deduction (almost 5 million taxpayers) had at least one member of the household age 65 or older; and
- At least 18% of all returns claiming the deduction had at least one member of the household who was age 50-64.
Even those with Medicare can spend a large portion of their income on out-of-pocket expenses. The average Medicare beneficiary spends about $5,680 out-of-pocket on medical care. Furthermore, older Americans and individuals with disabilities or chronic illnesses often face high costs for long term services and support, which are generally not covered by Medicare or private insurance, as well as hospitalizations and prescription drugs, which may have significant copayments. It should also be noted that the average annual cost of a private nursing home room is over $97,000. Tax relief in this area provides needed resources to Americans with high medical costs.
We thank you for the opportunity to share our views on this vital tax issue. We urge Congress to restore the Medical Expense Deduction and continue to support millions of middle class Americans with high health care costs.
Alliance for Aging Research
Allies for Independence
The Arc of the United States
American Association on Health and Disability
American Cancer Society Cancer Action Network
American Psychological Association
American Senior Housing Association
Autistic Self Advocacy Network
Christopher & Dana Reeve Foundation
Disability Rights Education and Defense Fund
Justice in Aging
Lupus Foundation of America
Lutheran Services of America
The Michael J. Fox Foundation for Parkinson’s Research
March of Dimes
Muscular Dystrophy Association
National Academy of Elder Law Attorneys
National Alliance on Mental Illness
National Association of Councils on Developmental Disabilities
National Association of State Head Injury Administrators
National Coalition for Cancer Survivorship
National Committee to Preserve Medicare and Social Security
National Council on Aging
National Council for Behavioral Health
National Disability Rights Network
National Multiple Sclerosis Society
National Organization for Rare Disorders
National Respite Coalition
Paralyzed Veterans of America
United Spinal Association