The Senate Tax Bill (HR 1 )recently passed will expand the break for high medical costs. According to reports, the bill preserve the deduction for medical expenses and lower the threshold for claiming it to 7.5% of adjusted gross income, from the current 10% but this would be temporary. By 2019 the threshold would return to 10% effectively only lasting 1 year. People aged 65 and older who previously had a medical expense deduction of 7.5% will now see it rise to 10% with the Affordable Care Act (ACA).
According to a Forbes report, the House version of the tax bill, passed in mid-November, eliminated the medical expense deduction, which is used by roughly 6% of tax filers who have expensive health care needs, including seniors in nursing homes, people with chronic medical conditions, and parents of disabled children.
There are fears the tax bill could force cuts to Medicare to those seniors who need care the most. The AARP, the large lobbying group for older Americans, opposes the Republican-sponsored Senate tax bill citing that the bill will lead to tax increases on many older Americans, and higher Obamacare insurance premiums. According to the AARP, the Congressional Budget Office’s finding that the bill would trigger automatic funding cuts of $136 billion next year, $25 billion of which would be from Medicare, unless Congress separately took action to prevent that.