The Republican tax bill unveiled earlier this week proposes the repeal of the medical expense deduction. The deduction allows people who spend more than 10 percent of their income on out-of-pocket health costs to write them off. Although the deduction is used by only 5 percent of tax filers, for the elderly and the invalid it can be significant. Professor Richard Kaplan, an expert in tax law and elder law spoke with CNBC Marketplace about the potential impact on this population.
"It tends to be mostly … older people who do not have long-term care insurance, and end up in a nursing home," said Kaplan.
The cost of living in a nursing home can easily run up to tens of thousands of dollars per year and wipe out the savings of elderly residents who are paying out of pocket. The deduction can be an important offset to taxes that elderly Americans would owe on their retirement savings distributions.
"For people who are receiving long-term care and are paying for it themselves, this is going to be a huge deal," said Kaplan.
The full article is available at CNBC.com; Kaplan's quote was also referenced in the Washington Post over the weekend.