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Guest Commentary April 12, 2002
Help Families Defray the Rising Costs of Health Care
The Honorable Philip Crane
The Medical Cost Deduction Act of 2002 makes health care more affordable by allowing individuals to deduct most of their medical expenditures that exceed 2 percent of their Adjusted Gross Income (AGI).
The rising costs of health care are a major concern for many Americans. Whether it is increased costs in health insurance premiums or the high cost of prescription drugs that seniors pay out of their own pocket, if it is unaffordable, many of these individuals will go without necessary health care treatment. The Medical Cost Deduction Act will help lower the tax burden and help families defray the rising costs of health care.
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Since 1942, taxpayers that itemize have been able to deduct health care costs that are in excess of a statutory percentage of their AGI. The current threshold where deductions begin is after 7.5 percent of AGI. Because of this relatively high floor, few taxpayers that itemize can reduce their taxable income through the existing deduction because their unreimbursed medical expenses are unlikely to exceed 7.5 percent of their AGI.
For instance, under current law, a taxpayer with an income of $30,000 would need to have out-of-pocket health care costs of $2,250 before they could begin taking deductions. Under my proposal that reduces the AGI requirement to 2 percent, that same taxpayer can start taking medical care deductions after $600 in expenses.
Back in 1954 when the threshold for deductibility of health expenses was lowered from 5 percent to 3 percent, the House Ways and Means Committee included in it's report that there is a "general agreement that limiting the deduction only to expenses in excess of 5 percent of AGI does not allow the deduction of all extraordinary medical expenses."
By lowering the deduction for medical expenses to 2 percent of AGI seniors may be able to better afford necessary medications and individuals may be better able to afford increased health care premiums.
Philip Crane, a Republican, represents the 8th Congressional District of Illinois in the U.S. House of Representatives. The above commentary has been adapted from a speech Rep. Crane delivered on the floor of the House, March 19, 2002. To contact him, Click Here.
The above column has been distributed by PoliticsOL.com.
