Eliminating the Medical Expense Tax Deduction Will Make High Health Care Costs Hurt Even More
<p>The House-passed Republican tax bill would jettison the medical expense deduction to help pay for some of its tax cuts. In a new <em>To the Point</em> post, the Commonwealth Fund’s Sara Collins and Munira Gunja say the debate over the deduction’s proposed elimination has shined a light on the growing number of Americans with very high out-of-pocket health care costs. About 9 million people took the deduction in 2015. </p><p>But Commonwealth Fund survey data suggest high health care costs affect many more people. In 2016, an estimated 40 million Americans spent 10 percent or more of their gross income on out-of-pocket medical expenses, not including premiums. For higher-income people, these expenses likely include costs associated with long-term care, support for people with disabilities, and serious illness and injuries. For those with lower incomes, even meeting a deductible can take a large bite of income. </p>
<p>“Given the relentless growth in health care costs and the growing inadequacy of health insurance, especially through higher deductibles, eliminating a tax deduction that at least offsets a portion of high medical costs for some families seems poorly timed,” the authors say.</p>