House Ways and Means Committee Tax Reform Markup
Wednesday, November 8, 2017
Congressman Danny K. Davis Statement in Support of the Medical Expense Tax Deduction
Currently, our law allows individuals to deduct qualified medical expenses that exceed 10 percent of a person's adjusted gross income for the year. H.R. 1 would repeal that itemized deduction come next year. The cost to repeal the medical expense deduction would be about $10 billion per year. Before the Patient Protection and Affordable Care Act (ACA), there were 10 million households that claimed medical expense deduction. Also, prior to ACA 60% of all bankruptcies were attributed to medical expenses by Americans.
One might ask the question what medical expenses are deductible. According to 1040.com, the following are just a few deductible expenses;
- Equipment and supplies –You may deduct any expenses relating to back supports, crutches, and wheelchairs, to name a few items. Artificial limbs and eyes may be deducted. If you have impaired hearing, you may deduct hearing aids. Buying a wig may be deductible if it’s advised by a doctor for a patient’s mental health.
- Dental services –Dental x-rays are considered preventive health measures and can be deducted. Other preventive health measures such as teeth cleanings, pulling teeth and applying crowns are deductible. More serious dental services like braces, oral surgery, and even dentures are deductible.
- Professional services –Professional services covers the costs of specialists such as dermatologists, neurologists and OB/GYNs. Chiropractors also qualify, as do licensed psychologists and psychiatrists.
- Medical treatments and laboratory tests –Childbirth and prenatal medical treatments are deductible, including childbirth classes. Lab tests, such as blood and metabolism tests and urine analysis, are deductible.
- Nursing services –You may deduct any nursing services you’re not reimbursed for, and the service doesn’t have to be provided by a licensed nurse. If you hire someone who performs nursing services – licensed or not – you may deduct those wages as a medical expense.
- Hospital services –Besides general hospital services, including meals if you’re receiving inpatient care, you can deduct other services. You can deduct any service by an anesthetist or any fees for using the operating room.
- Insurance premiums –If you pay for your own insurance, you’re eligible to deduct any premiums you pay. You can also deduct any premiums for Medicare A – if Social Security doesn’t pay for it – and Medicare Part B and D.
- Home renovation –If you renovate your home because of a medical condition or disease, you may be eligible to deduct construction, installation or maintenance costs.
- Travel and lodging –Mileage for traveling to see a doctor or specialist is deductible. You may also deduct airfare if required to see a doctor outside of your area. If you attend a medical conference for a condition that you or a dependent has, you may be eligible to deduct any registration fees for the conference. Staying at a hotel or motel while receiving outpatient medical treatment is deductible if the primary reason for the visit is for medical care. The deduction is $50 per night per person.
In my state of Illinois, 373,168 residents in 2014 claimed the medical expense deduction and 266,521 of those claiming it reported income of $75,000 or less and 191,105 of those claiming it reported income of $50,000 or less.
The current bill before us, was never subject to a hearing, never had bipartisan participation from both sides of the isle, never allowed input from low to middle income taxpayers, never was transparent from beginning conception to the end of drafting. If we are series of assisting the middle class - removing this provision makes no sense. H.R. 1 will give millions of dollars in tax cuts to the wealthiest 1% while low and middle income wage earners would get somewhere a few hundred dollars a year.
Congressman Davis is the Ranking Member of the Human Resources Subcommittee of the House Ways and Means Committee