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Valued Social Butterfly
Posts: 985
Registered: ‎01-02-2012

Re: What do you think about the impending health tax reform?

[ Edited ]
Message 21 of 59 (1,438 Views)

rker321 wrote:



I have no comprehension as to how confused you all seem to be in regards of what I have posted. Sorry, never been on what you call a public Part C  health plan. don't even know what that is. Went from an INsurance (Anthem) to an AdvantageMedicare  when my INsurance  in 2004 went  up to  a premium of 750.00 a month  Like I have said in other boards, you both need to get together and get your knowledge in unison, so you don't  confuse the public.

Rker321

 

You're correct that I am completely confused about what you wrote in about five comments on two or three different Topics' threads. Many of the things you wrote in one place contradict what you wrote in other places; that's what makes them confusing. That is why I suggested you go to a local senior center or like facility and get some help from the free, unbiased Medicare volunteer (and possibly the tax volunteer).

 

If you have what you call "AdvantageMedicare," then you most likely ARE on a public Part C health plan even though you think you never have been. Public Part C of Medicare is described in Section 5 of "Medicare and You, 2018;" Medicare Advantage is the most popular type of public Part C Medicare health plan. Perhaps when you write that you have an "AdvantageMedicare" plan, you are just transposing the words and you have a public Part C Medicare Advantage health plan (see Note). But it is also possible you have something else. As I have written three times now, I do not want to know. For many reasons, it is not a good idea to put all kinds of personal medical and insurance information on a public commenting board. If you in fact do have Part C but think you never have had it, all the more reason to go to the senior center.

Finally perhaps you do not understand how a public commenting board works in general. Gail1 and I do not know each other. We can't get together. We (speaking for myself) do not want to get our "knowledge in unison" (although I find Gail1 posts a lot of stuff I did not know before I read it). These are comments (opinions, etc.). This is not Dear Abby. Gail1 primarily comments on Medicare "how-to." I primarily comment on Medicare statistics.

 

NOTE for anyone else reading this comment (rker321, please do not read the following Note):

 

As per my original comment in this thread, chrono comment 3, all public Part C Medicare Advantage plans have a Maximum Annual Out of Pocket (MOOP) spending cap. Those caps range from $2000 to $6700 a year (in general, the higher the monthly premium the lower the MOOP, just as with all insurance). The MOOP is not a deductible; the MOOP is the most you can spend in co-pays, etc. for Medicare covered medical services (typically, most usually an annual physical exam, Part C plans also include coverage of medical services not covered by Original Medicare). In addition almost all public Part C health plans also have integral self-administered prescription drug coverage that more or less follows Part D rules in terms of maximum annual out of pocket drug spending.

 

Because of these mandatory caps (which Original Medicare does not have) and how the plans work, depending on where a person lives and his/her health and which type of Part C health plan is selected and the person's drug needs and other factors, it is very hard but not impossible to spend up to these maximums. But even if a person on Part C spends to the MOOP, it would be also very hard but not impossible to spend so much out of pocket that that out of pocket medical spending alone would make using Schedule A a better approach than using the standard deduction when filing Form 1040 with the IRS. Of course if a person had large mortgage interest expenditures and/or made very generous charitable donations and/or incurred large casualty and/or gambling losses and/or paid a large dollar amount in state and local income and property taxes -- if the latter applied, that would mean they are rich -- then it would make sense to itemize deductions and add any eligible out of pocket medical spending if applicable to Schedule A.

 

People with public Part C Medicare plans make up about a third of the people on Medicare so roughly they also make up about the same percentage of seniors. Another third of seniors (but this percentage is decreasing) have very good private group retirement insurance that makes it even less likely that they would spend so much out of pocket that out of pocket medical spending alone would make using Schedule A a better approach than using the standard deduction when filing Form 1040 with the IRS. A smaller group of seniors have private Medigap insurance, most with first dollar coverage (but not of as many medical services as public Part C plans), and this group is also unlikely to incure out of pocket medical spending alone that would make using Schedule A a better approach than using the standard deduction when filing Form 1040 with the IRS. Of course the premiums for these various plans as well as standalone Part D plans and the Part B premium itself are also figured into the calculation but worst case, that is only about $3600 a year, less than half the  current individual standard deduction. Another group of seniors are on Medicaid and unfortunately for them are not affected by any of these calculations. A very very small (less than 2%) of seniors have no Medicare at all or have Medicare but no supplement; this final very very small group are the most likely group  to have out of pocket medical expenses over 10% of their income. Another small group of seniors have private or semi-private skilled nursing not covered by Medicare or any of its supplements and this group might also have  out of pocket medical spending that alone that would make using Schedule A the better approach. Of course this latter group would likely also be wealthy.

 

Given the little we know at this point about the recently proposed tax reform, using the new standard deduction would still be a better deal than itemizing deductions if it were passed as currently written. And it appears that even if medical deductions were still allowed under the old rules (by which you can deduct only those medical expenses that exceed 10% of income) when the new law is passed, the standard deduction is still going to make the most sense for most seniors, just as it always had. However, reporting on the current tax reform proposal indicates that charitable deductions and property taxes will still be deductible so maybe some relatively few relatively rich but relatively unhealthy seniors will be harmed by the elimination of the over-10%-of-income medical expense deduction.


Valued Social Butterfly
Posts: 8,793
Registered: ‎08-18-2008

Re: What do you think about the impending health tax reform?

Message 22 of 59 (808 Views)

rker321 wrote:

GailL1 wrote:

rker321 wrote:

GailL1 wrote:

 

For medical expenses of $11 - $13,000 per year, you would have to have some other itemized deduction to now get any benefit over the standard deduction + the senior/blind exemption  or even in the tax reform proposal which would give you and your husband MFJ a $24,000 standard deduction.

 

Gail, I am not blind by any means, I only have Macular degeneration in one eye and has not progresses in two years.
So, how can I qualify for for a senior/blind exemption?

 

 

 

 


 


Who does your taxes, rk321?

From the IRS for 2016'tax year

 

2016 Standard Deduction Amounts
There are two main types of tax deductions: the standard deduction and itemized deductions. You can claim one type of deduction on your tax return, but not both.

For example, if you claim the standard deduction, you cannot itemize deductions – and vice versa (if you itemize deductions, you cannot claim the standard deduction). You are allowed to use whichever type of deduction results in the lowest tax.

The standard deduction is subtracted from your Adjusted Gross Income (AGI), thereby reducing your taxable income. For tax year 2016, the standard deduction amounts are as follows:

Filing Status Standard Deduction
Single $6,300
Married Filing Jointly $12,600
Married Filing Separately $6,300
Head of Household $9,300
Qualifying Widow(er) $12,600

Note that there is an additional standard deduction for elderly or blind taxpayers, which is $1,250 for tax year 2016. The additional standard deduction amount increases to $1,550 if the individual is also unmarried and ot a qualifying widow(er). 

 

OUr tax accountant does our taxes, and had determined that itemizing is the best thing to do for  us.
I don't understand your post. I don't even qualify for that additional standard deduction, I am not unmarried or a widow. 
So, I don't understand your post.


Let's see if I can explain it better for you.

This might help too, if you want to use your real numbers - it goes thru 2016

IRS: How Much Is My Standard Deduction?

From the IRS: IRS: Standard Deduction at a Glance

The standard deduction is a dollar amount that reduces the amount of income on which you are taxed and varies according to your filing status; there is also an additional standard deduction for individuals who are blind or age 65 or over.

You CANNOT take the standard deduction if you itemize deductions. In addition, certain individuals cannot take a standard deduction or can take only a reduced standard deduction.

 

IRS: For Tax Year 2016 - Itemize or Choose the Standard Deduction

 

EXAMPLE:  You and your hubby file MFJ (married filing joint)

For 2016 your standard deduction would have been $ 12, 600 + an extra SENIOR (over 65) standard deduction amount - $ 1250 each X 2 = $ 2500 (if one or both of you had been blind according to the IRS definition there would have been another extra standard deduction added.

So in 2016, you standard deduction for MFJ seniors would have been

$ 12,600 + $ 1250 + $ 1250 = $ 15,100

 

 

Now let's say you both have a combined AGI (adjusted gross income) of $ 36,000

On sch A your medical and dental deduction for $ 12, 700 in expenses would have been figured using the 2016 floor rate of 7.5%

$ 36,000 (AGI) X 7.5% = $ 2700

You could claim claim only $ 10,000 in medical expenses ( $ 12,700 - $ 2700 = $ 10,000)

Therefore you would have had to come up with another $ 5100 in other Schedule A deductions to even get to your standard deduction of $ 15,100 in 2016 - those expenses could have been

mortgage interest, state and local taxes, property taxes, charitable contributions, etc.

But all of the itemized deductions (using the floor cap on medical and dental expenses) had to be greater than the standard deduction of $ 15,100 for it to have worked out better for you to itemize rather than taking the standard deduction.

 

Now for 2017, that floor limit on medical and dental is being raised for those over 65 - it was raised on the rest of the people several years ago.  The 2017 floor is 10%.

So using the same figures as above for 2017 with the 2017 standard deduction + the extra one for being over 65 - you and hubby.

 

2017 tax year IRS Federal Standard Deduction

Married Filing Joint Standard Deduction 2017 is $ 12,700

Increased Standard Deduction - Additional Standard Deductions

Age: If you are age 65 or older, you may increase your standard deduction by $1,550 if you file single or head-of-household. If you are married filing jointly and you OR your spouse is 65 or older, you may increase your standard deduction by $1,250. If BOTH you and your spouse are 65 or older, you may increase your standard deduction by $2,500.

 

So in 2017, Your total Standard deduction for MFJ (you and hubby) is $ 12,700 + $ 2500 = $ 15,200

Using the same example with the 2017 changes covered here:

MFJ with an AGI of $ 36,000.

$ 36,000 X 10% = $ 3600

Actual medical expenses $ 12,700 - $ 3600 = $ 9100 of your medical expenses are deductible.

You would have to come up with another $ 6100 in Schedule A deductions on top of the $9100 in medical expenses to just meet the Senior MFJ Standard Deduction for 2017 or $ 15,200.

 

Currently these would include the other things on sch A deductions - some are also at a income limit floor  IRS: Credits and Deductions for Individuals.

 

 

Hope this kind of helps -

As far as the tax reform - you will have to decide.  Your personal exemptions in 2016 was $4,050 for each of you = $ 8100.  In 2017, it remains the same.

 

Valued Social Butterfly
Posts: 22,426
Registered: ‎03-04-2009

Re: What do you think about the impending health tax reform?

Message 23 of 59 (825 Views)

GailL1 wrote:

rker321 wrote:

GailL1 wrote:

 

For medical expenses of $11 - $13,000 per year, you would have to have some other itemized deduction to now get any benefit over the standard deduction + the senior/blind exemption  or even in the tax reform proposal which would give you and your husband MFJ a $24,000 standard deduction.

 

Gail, I am not blind by any means, I only have Macular degeneration in one eye and has not progresses in two years.
So, how can I qualify for for a senior/blind exemption?

 

 

 

 


 


Who does your taxes, rk321?

From the IRS for 2016'tax year

 

2016 Standard Deduction Amounts
There are two main types of tax deductions: the standard deduction and itemized deductions. You can claim one type of deduction on your tax return, but not both.

For example, if you claim the standard deduction, you cannot itemize deductions – and vice versa (if you itemize deductions, you cannot claim the standard deduction). You are allowed to use whichever type of deduction results in the lowest tax.

The standard deduction is subtracted from your Adjusted Gross Income (AGI), thereby reducing your taxable income. For tax year 2016, the standard deduction amounts are as follows:

Filing Status Standard Deduction
Single $6,300
Married Filing Jointly $12,600
Married Filing Separately $6,300
Head of Household $9,300
Qualifying Widow(er) $12,600

Note that there is an additional standard deduction for elderly or blind taxpayers, which is $1,250 for tax year 2016. The additional standard deduction amount increases to $1,550 if the individual is also unmarried and ot a qualifying widow(er). 

 

OUr tax accountant does our taxes, and had determined that itemizing is the best thing to do for  us.
I don't understand your post. I don't even qualify for that additional standard deduction, I am not unmarried or a widow. 
So, I don't understand your post.

Valued Social Butterfly
Posts: 22,426
Registered: ‎03-04-2009

Re: What do you think about the impending health tax reform?

Message 24 of 59 (736 Views)

Gail  thank you for the link. I have read and reread all of those rules over and over again. I don't happen to approve as to the pre conditions that the Insurances have decided not to cover under a Medigap program.

Those conditions and exceptions have been approved and done by the insurance actuaries.   when I contacted Medicare that is what they have told me.
Those rules unfortunately don't apply to me. I don't fall into any of the exceptions by which I could go back to a Supplemental. 
I went from my Employer Health Care insurance to the Medicare Advantage insurance that I have had since I terminated my insurance with my employer.
So, those rules in your link are quite clear I have no qualms with any of them.
I realize that the insurances have taken the option to delineate the pre conditions that they feel will provide them with the least amount of risks.
And for that ,I do realize that there is no solution to the problem unless Medicare takes a look at those pre conditions that they have t,and see which ones are the ones that they should have.
My problem now is the fact that Medical deductions will not be able to be deducted. and that I don't like. that one bit.
It most definitely impact me. and I am absolutely sure that it will impact many more seniors. I am not an exception.
Whatever you and Byron want to  say, sorry, but I don't really feel is fair to the senior that will impact.
And sorry, many seniors do itemize. a lot more that many apparently want to accept.



 

 

Valued Social Butterfly
Posts: 8,793
Registered: ‎08-18-2008

Re: What do you think about the impending health tax reform?

Message 25 of 59 (562 Views)

rker321 wrote:

GailL1 wrote:

 

For medical expenses of $11 - $13,000 per year, you would have to have some other itemized deduction to now get any benefit over the standard deduction + the senior/blind exemption  or even in the tax reform proposal which would give you and your husband MFJ a $24,000 standard deduction.

 

Gail, I am not blind by any means, I only have Macular degeneration in one eye and has not progresses in two years.
So, how can I qualify for for a senior/blind exemption?

 

 

 

 


 


Who does your taxes, rk321?

From the IRS for 2016'tax year

 

2016 Standard Deduction Amounts
There are two main types of tax deductions: the standard deduction and itemized deductions. You can claim one type of deduction on your tax return, but not both.

For example, if you claim the standard deduction, you cannot itemize deductions – and vice versa (if you itemize deductions, you cannot claim the standard deduction). You are allowed to use whichever type of deduction results in the lowest tax.

The standard deduction is subtracted from your Adjusted Gross Income (AGI), thereby reducing your taxable income. For tax year 2016, the standard deduction amounts are as follows:

Filing Status Standard Deduction
Single $6,300
Married Filing Jointly $12,600
Married Filing Separately $6,300
Head of Household $9,300
Qualifying Widow(er) $12,600

Note that there is an additional standard deduction for elderly or blind taxpayers, which is $1,250 for tax year 2016. The additional standard deduction amount increases to $1,550 if the individual is also unmarried and not a qualifying widow(er).

Valued Social Butterfly
Posts: 8,793
Registered: ‎08-18-2008

Re: What do you think about the impending health tax reform?

Message 26 of 59 (480 Views)

Here is the Medicare.gov page which stipulates WHEN you can buy a Medicap policy and cannot be denied nor can you be changed more for any sort of health condition.

 

Medicare.gov - Guaranteed Issue Rights

 

I don't have time to get into all of this right now - I have landscapers here and want things done the way Imwant them 

 

But other than these specified guaranteed times an insurance company can deny you, underwrite you or not - it is up to them.

 

In fact even if they write you a policy, they can even deny you coverage for a specific pre-existing condition forms specified time frame.

Valued Social Butterfly
Posts: 22,426
Registered: ‎03-04-2009

Re: What do you think about the impending health tax reform?

Message 27 of 59 (296 Views)

byrondennis wrote:

rker321 wrote:

So, now, both of you Gail and ByronDennis,  realize that I a poor retiree, with a low middle class income.


No, sorry, but that is not what my comments said. What I wrote is that

  • I do not understand why you are itemizing deductions and
  • I don't understand why you don't have Part D.

As I also wrote, I don't care to know; don't give all these personal details on a public web site. But nothing you have written compared with nothing written about the tax reform proposal in the last 24 hours since it was announced would "increase your income by $13,000."

 

As for the bigger problem, you write, "I have even spoken to Medicare about the very  unfair manner in which insurances provide entrance to future Supplemental  beneficiaries." I have no idea what that means. Gail seems to think it means that you were once on a public Part C health plan and then tried to go over to private Medigap and that you live in a state in which insurers can not only underwrite people that try to make that move but in a state that can also turn you down completely if you try to make that move. If that's the case, you should support the Medicare reform proposal that has been held up in Congress for six years by the left; it would solve your problem.


Boy,  are you both wrong!!!  and I have no comprehension as to how confused you all seem to be in regards of what I have posted.
You people apparently like to listen to yourselves and not to what other post or are trying to say.
Sorry, never been on what you call a public Part C  health plan. don't even know what that is.
Went from an INsurance (Anthem) to an AdvantageMedicare  when my INsurance  in 2004 went  up to  a premium of 750.00 a month with a cap of a million dollars, a 600. deductible for medical expenses and a 1000.00 for a deductible on prescription drugs.  It was my employer retirement Health Care Insurance. At that point in time neither my husband or myself didn't even reached the 600.00 a year in our deductible for medical. so we realized that an Advantage was a better choice for  us.
Like I have said in other boards, you both need to get together and get your knowledge in unison, so you don't  confuse the public.


Valued Social Butterfly
Posts: 22,426
Registered: ‎03-04-2009

Re: What do you think about the impending health tax reform?

Message 28 of 59 (271 Views)

I have no ideas as to how right or wrong is what you both are discussing. but I checked with Medicare regarding the Medigap rules, and they told me that it was the actuaries of the Insurance agencies that made the rules for the exclusion on a Medigap/Supplemental insurance. and not the Government.

Also, provided information and this may be different in different Sates, but my husband who is older than 80 can get a Supplemental and there is no age limit in which he can change from the Advantage program to a Supplemental.

So, you both get together and start by combining your knowledge and post things that are common to us all.

Valued Social Butterfly
Posts: 985
Registered: ‎01-02-2012

Re: What do you think about the impending health tax reform?

Message 29 of 59 (251 Views)

rker321 wrote:

So, now, both of you Gail and ByronDennis,  realize that I a poor retiree, with a low middle class income.


No, sorry, but that is not what my comments said. What I wrote is that

  • I do not understand why you are itemizing deductions and
  • I don't understand why you don't have Part D.

As I also wrote, I don't care to know; don't give all these personal details on a public web site. But nothing you have written compared with nothing written about the tax reform proposal in the last 24 hours since it was announced would "increase your income by $13,000."

 

As for the bigger problem, you write, "I have even spoken to Medicare about the very  unfair manner in which insurances provide entrance to future Supplemental  beneficiaries." I have no idea what that means. Gail seems to think it means that you were once on a public Part C health plan and then tried to go over to private Medigap and that you live in a state in which insurers can not only underwrite people that try to make that move but in a state that can also turn you down completely if you try to make that move. If that's the case, you should support the Medicare reform proposal that has been held up in Congress for six years by the left; it would solve your problem.

Valued Social Butterfly
Posts: 985
Registered: ‎01-02-2012

Re: What do you think about the impending health tax reform?

Message 30 of 59 (235 Views)

GailL1 wrote:



No, it is not because of your pre-existing condition specifically - it is because you do not have a situation where Medicare (the government) gives you "guaranteed issue rights".  Thus Medicare (the government) gives Medigap insurers the right to either deny you coverage or put stipulations on coverage for the pre-existing condition, in some cases. This is because, Medicare (the government) does not want people who have been under Medicare Advantage plans to switch to original Medicare with a Medigap when they get health care costly.

 

Gail I am pretty certain the rules on whether or not Medigap is available at any time without underwriting long predates public Part C of Medicare.
Even if I am wrong about that, the Medigap rule to which you refer is not based on Federal government rules. Whether you can get Medigap outside of the initial enrollment period is based on state law, not a Federal rule. In my state, enrollment is not only guaranteed at any time for any reason but it is also both:
continuous (can sign up or change a Medigap plan any month for any reason effective first of the next month; this is the trick if you have scheduled surgery)
community rated (so I can switch over from public Part C when I am 80 and my favorite doctor retires and I will pay the same as a newbie only 65)