GOP tax plan would take away financial lifejacket for seniors

They could lose deduction that covers payments for nursing homes, assisted living or hospital care.

Many seniors are scared right now that the Republican tax plan, if passed, will eliminate an important deduction that helps them defray the high cost of medical care.

Under current tax law, if you itemize, you can deduct medical expenses for yourself, your spouse and your dependents if the cost exceeds 10 percent of your adjusted gross income.

The proposed bill would do away with this deduction.

What is of particular concern for some seniors is that this means they would be losing a deduction that covers payments for nursing homes, assisted living or inpatient hospital care.

Nearly 8.8 million households filed 2015 returns that claimed the medical and dental expenses deduction, according to the IRS. AARP’s Public Policy Institute says that 49 percent of those who took the deduction had income of less than $50,000, and 69 percent had income under $75,000.

I asked readers to comment on what they thought of the plan to eliminate the deduction for medical expenses.

“This will be catastrophic for my 90- and 93-year-old parents, who live in assisted living,” wrote Marla Payne Wise from Canton, Georgia. “My husband and I also itemize our medical expenses, which will only get higher as we age.”

John McCreight of Hilton Head Island, South Carolina, estimates the loss of the deduction would cost him an extra $6,570 in taxes. “I hope and pray that whatever changes are made, this deduction will stay.”

One Virginia resident said the deduction is important to her 90-year-old widowed mother, who has numerous health problems and is in an assisted-living facility.

“My parents were committed to serving their community through education, and they provided for their children on the modest salaries of two public school teachers,” the reader wrote, asking for anonymity. “Thanks to their lifelong habit of careful saving and investing, my mother is able to cover her own long-term care expenses through her pension, Social Security, and investment portfolio. However, this is possible only because she can deduct so many of her long-term care and other medical costs. If the medical deduction were taken away, many of the funds that currently go toward her support would be eaten up by taxes, thus depleting her assets more rapidly — and with a concurrent rise in her medical costs as she further ages. Congress needs to understand that this greatly increases the probability of her outliving her savings, and this in turn would increase costs to the government for her care (state-sponsored assistance and/or Medicaid) — whereas now she has the means to pay from her own resources.”

Many of the people who responded said they weren’t looking for a handout, just a helping hand.

“I well realize that new policy changes are never going to make every citizen happy, and some of us may have to suffer to support the majority,” wrote Dottie Rogers of St. Louis, Missouri. “Losing this deduction will really be tough. I had to put my husband, a 24-year stroke victim, into a nursing home in July 2016. I am now watching our retirement assets go down at a rapid pace. I wanted to be a responsible individual and not seek out help from the government. But if this deduction goes away, which allowed me to barely break even last year, this will be an additional push down the slide to a zero balance in life savings.”

One 78-year-old retiree in North Carolina said the Republican tax bill would make his taxes go up by 23 percent. On his 2016 tax return, he was able to deduct $12,000 in medical expenses.

Linda Warner worries about the financial impact on her 93-year-old mother, who has severe dementia and lives in an assisted-living memory-care facility in Wisconsin. For 2016, Warner said her mother was able to deduct $56,711 in medical expenses, leaving her taxable income of just over $28,000.

“Mom has almost used up her four years of her long-term care insurance benefits,” Warner said. “She earns $90,000 a year from retirement annuities and Social Security. Her assisted-living memory-care expenses are about $7,650 a month. As you can see, even someone with a relatively high income for a single person is going to be (hurt) by this tax plan.”

In the context of fixing a complicated tax code, it might be easy to dismiss the voices of people who decry that their deduction shouldn’t be touched. Once a tax break is given, it can be painfully hard for it to be taken away.

But in this case, a lot of folks would be significantly harmed were Congress to eliminate a financial lifejacket that has helped them stay afloat amid the weight of their medical expenses.

© 2017, Washington Post Writers Group

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

ZeroAvia founder and CEO Val Mifthakof, left, shows Gov. Jay Inslee a hydrogen-powered motor during an event at ZeroAvia’s new Everett facility on Wednesday, April 24, 2024, near Paine Field in Everett, Washington. (Ryan Berry / The Herald)
ZeroAvia’s new Everett center ‘a huge step in decarbonizing’ aviation

The British-American company, which is developing hydrogen-electric powered aircraft, expects one day to employ hundreds at the site.

Allan and Frances Peterson, a woodworker and artist respectively, stand in the door of the old horse stable they turned into Milkwood on Sunday, March 31, 2024, in Index, Washington. (Ryan Berry / The Herald)
Old horse stall in Index is mini art gallery in the boonies

Frances and Allan Peterson showcase their art. And where else you can buy a souvenir Index pillow or dish towel?

Everett
Red Robin to pay $600K for harassment at Everett location

A consent decree approved Friday settles sexual harassment and retaliation claims by four victims against the restaurant chain.

magniX employees and staff have moved into the company's new 40,000 square foot office on Seaway Boulevard on Monday, Jan. 18, 2020 in Everett, Washington. magniX consolidated all of its Australia and Redmond operations under one roof to be home to the global headquarters, engineering, manufacturing and testing of its electric propulsion systems.  (Andy Bronson / The Herald)
Harbour Air plans to buy 50 electric motors from Everett company magniX

One of the largest seaplane airlines in the world plans to retrofit its fleet with the Everett-built electric propulsion system.

Simreet Dhaliwal speaks after winning during the 2024 Snohomish County Emerging Leaders Awards Presentation on Wednesday, April 17, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Simreet Dhaliwal wins The Herald’s 2024 Emerging Leaders Award

Dhaliwal, an economic development and tourism specialist, was one of 12 finalists for the award celebrating young leaders in Snohomish County.

Lynnwood
New Jersey company acquires Lynnwood Land Rover dealership

Land Rover Seattle, now Land Rover Lynnwood, has been purchased by Holman, a 100-year-old company.

Szabella Psaztor is an Emerging Leader. (Olivia Vanni / The Herald)
Szabella Pasztor: Change begins at a grassroots level

As development director at Farmer Frog, Pasztor supports social justice, equity and community empowerment.

Simreet Dhaliwal is an Emerging Leader. (Olivia Vanni / The Herald)
Simreet Dhaliwal: A deep-seated commitment to justice

The Snohomish County tourism and economic specialist is determined to steer change and make a meaningful impact.

Nathanael Engen, founder of Black Forest Mushrooms, an Everett gourmet mushroom growing operation is an Emerging Leader. (Olivia Vanni / The Herald)
Nathanael Engen: Growing and sharing gourmet mushrooms

More than just providing nutritious food, the owner of Black Forest Mushrooms aims to uplift and educate the community.

Owner and founder of Moe's Coffee in Arlington Kaitlyn Davis poses for a photo at the Everett Herald on March 22, 2024 in Everett, Washington. (Annie Barker / The Herald)
Kaitlyn Davis: Bringing economic vitality to Arlington

More than just coffee, Davis has created community gathering spaces where all can feel welcome.

Emerging Leader John Michael Graves. (Ryan Berry / The Herald)
John Michael Graves: Champion for diversity and inclusion

Graves leads training sessions on Israel, Jewish history and the Holocaust and identifying antisemitic hate crimes.

Gracelynn Shibayama, the events coordinator at the Edmonds Center for the Arts, is an Emerging Leader. (Olivia Vanni / The Herald)
Gracelynn Shibayama: Connecting people through the arts and culture

The Edmonds Center for the Arts coordinator strives to create a more connected and empathetic community.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.