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

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

Message 41 of 59 (209 Views)

I have been doing some more investigating and do have an update.

 

As you know each year, Congress does some tax extenders on provisions in the tax code which have expired during the year.

 

This medical deduction for those over 65 years old reverting back to the 2016 AGI limit of 7.5% is one that is being looked at - 

 

Last year HR3590 passed the House doing the same thing but included everybody.  it went to the Senate, Senator McCain introduced the sister bill there in Sept. 2016 - the CBO determined that this would negatively affect tax collections, specifically for the ACA.  So this legislation covering everybody, not just seniors died.

 

The new Senate introduced bill has narrowed the scope of inclusion to just those over 65.

 

The Congressional Research Service did an analysis of all those tax extenders back in August 2017.

 

CRS R44925 - Recently Expired Individual Tax Provisions (“Tax Extenders”): In Brief

 

So I guess there still could be a reprieve either from the new proposed legislation or an act by congress on this tax provision.

 

But I am stilling have problems with the related numbers -

 

The actual reasoning for increasing the % of AGI was to keep those in higher incomes from taking so much advantage of the deduction.  

 

This is deduction also includes the cost of insurance as well as OOP cost.

For the senior population this may include a higher amount paid for LTC policies.

 

Many senior have few other itemized deduction to add to medical expenses to go over the standard deduction + the added amount for being over 65 .

So even at the old rate of 7.5% of AGI, without other itemized deductions added to the medical expense applicable amount, they would have to have a big income to make the amount go over the standard deduction + the added amount of being over 65.

 

Seniors in the lower income levels can get extra help or can qualify for Medicaid so I don't think we are talking about them using this deduction rather than the standard senior deduction.

 

So it seems to me that the people we are really talking about mostly are those in income levels of about $ 85,000 a year unless they have substantial other itemized deductions to add to their medical expenses over the AGI limit.

 

Maybe I just need some actual numbers to see who we are really talking about here - and unless I am missing something, we aren't talking about the average situation contrary to the AARP advocacy position.  They gave stats in their position which I am finding difficult to substantiate even using IRS data from the last year posted, 2014.

 

IRS Tax data 2014 Individual Income Tax Returns with Exemptions and Itemized Deductions

 

follow the spread sheet over to the Medical Expense itemized deduct rows -

 

 

 

 

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

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

[ Edited ]
Message 42 of 59 (230 Views)

ReTiReD51 wrote:


So in conclusion you’ve decided its Obama, the democrats and lefties responsible for any problems with our health care system and a MA plan for everyone could be the saving grace we need to fix those problems.

Ok, thanks byrondennis.


No, in conclusion you wrote five or six lies about Medicare in chrono comment 10 (and two about me), and I called you out for your lies and your condescending crap comment 10. But your being too lazy to fix the lies you told in chrono comment 10, you are now instead lying about what I said in chrono comment 16. Typical

Recognized Social Butterfly
Posts: 870
Registered: ‎09-03-2011

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

Message 43 of 59 (236 Views)

byrondennis wrote:

ReTiReD51 wrote:


byrondennis you never let an opportunity go by to wholesale a Medicare Advantage plan.

 

$3500 out-of-pocket? Maybe in 2007 but today’s 2017 MA out of pockets average try $6700. So one major health problem or accident could set you back $6700 plus if you’re out of network and responsible for higher out-of-pocket expenses.

 

You do know MA plans are networks and usually only cover certain geographic regions. So if you’re visiting the grandkids or friends in another state expect to pay higher out of network costs if you need health care.

 

MA plan deductibles and co-pays are not guaranteed renewable and can change every year and even pull out of your geographical area. Or your doctor could decide to leave your network in the middle of the year and leave you scrambling for another doctor or plan. But don’t count on going to Original Medicare because those medigap plans will be there to underwrite you.


ReTiReD

 

Sorry but you are incorrect. You should very carefully check facts before posting:

  • On the first point you are totally 100% wrong. $6700 is NOT the average MOOP under a public Part C health plan; $6700 is by law the MAXIMUM MOOP. Maximum does not equal average. But $6700 is the typical MOOP on some zero premium plans that are not that popular (and if you choose a zero premium plan of course you get all the other benefits of Part C and also "save" about $1000 a year; if you are disciplined enough to bank those savings, you'll more than cover the MOOP in the well under 1% chance you ever reach a MOOP in any one year of the average 17 years that you are on Medicare)
  • As I wrote in chrono comment 3 the average MOOP for a public Part C plan that costs around $70 (that's a key part of my one example that you took out of context just as you took the whole Part C example out of context from the other three examples in chrono comment 3) in 2017 is around $3000. You are right that the average MOOP has steadily increased because of the so-called "cuts" made by Obamacare to the public Part C Medicare program but you are totally wrong that all MOOPs are $6700.
  • In fact the average of all MOOPs... in all the Part C plans (which are not all Medicare Advantage plans), including those that range from zero to over $200 in monthly premiums... all over the country no matter what the healthcare costs in the different regions... is only around $5000 in 2017, NOT $6700 (the word "average" really seems to throw people on this AARP Medicare and Insurance community for a loop even though buying insurance is all about playing the averages; go figure)
  • Even then it is very very unlikely that one major health problem or accident would run anyone on Part C up against a MOOP. The average Part-A hospital co-pay under Part C is under $1000, less than on Part A even for many people who also have private Medigap insurance. The average Part A SNF co-pay under Part C is better than on Part A with Medigap since the price goes to zero after a few weeks whereas on Part A with a private Medigap plan the price after a few weeks goes up. A MOOP is the most you can spend, not a deductible as unscrupulous insurance agents try to tell seniors. Just the opposite, those that face MOOP issues tend to have ongoing chronic illnessess. So all they have to do is pay more each month in Part C premiums and get Part C plans with lower MOOPs (these tend to be people on Part C PACE and special needs plans, not on vanilla public Part C Medicare Advantage)
  • It is a total 100% lie that you have to pay out of network prices if you have an emergency medical need under Part C when visiting the grandkids; typical lefty senior hate speech from the lefty political groups like AARP, CMA, Kaiser Insurance, MRC, NCSSPP, the Urban Institute and the like.
  • Furthermore people do not sign up for managed, networked Medicare and then go out of network. This is a typical far lefty "Big Lie" -- like claiming someone is proposing Medicare vouchers when the last one to make that claim was a Democrat Socialist... in 1981 --  from the lefty political groups like AARP, CMA, Kaiser Insurance, MRC, NCSSPP, the Urban Institute and the like. With the exception of Kaiser, they all hate the fact that seniors have the choice of managed, networked care (Kaiser is the third largest sponsor of managed, networked Part C health palns and its lies are just typical marketing trying to hurts its Part C competitors)
  • Despite what Obama, Pelosi (but not Schumer), Sanders, Warren, the AARP, CMA, Kaiser Insurance, MRC, NCSSPP, the Urban Institute and the like claim about public Part C Medicare, we seniors who are on Part C are not stupid dupes of the insurance industry. First, despite your typical lefty insult, most of the 20,000,000 of us on Part C have been in managed care our whole lives and know how it works. Being on Part C for us has nothing to do with Medicare. Second, most of our Part C plans are sponsored by integrated health delivery systems and charities, not by Obama's supposed blood-sucking insurers (even as he built his plan for people under 65 all around blood-sucking insuers--hypocrites or what?).
  • And finally in my state and at least 20 others, if I ever choose to leave Part C, I have continuously open, guaranteed issue Medigap (in my state it is even community rated so if that happens when I'm 80 -- which I can see happening in five years because my doctor will have retired -- I get to pay the same Medigap premium as a 65 year old). Of course, this last point is unfair. But in reverse it is unfair today that I, on Part C, am getting only $96 out of the Medicare Trust funds on average whereas my best friend on Medigap and my cousin on group retiree insurance is getting $100. So it all evens out in the long run, which is where we're all going

 

So in conclusion you’ve decided its Obama, the democrats and lefties responsible for any problems with our health care system and a MA plan for everyone could be the saving grace we need to fix those problems.

Ok, thanks byrondennis.

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

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

[ Edited ]
Message 44 of 59 (246 Views)

ReTiReD51 wrote:


$3500 out-of-pocket? Maybe in 2007 but today’s 2017 MA out of pockets average try $6700. So one major health problem or accident could set you back $6700 plus if you’re out of network and responsible for higher out-of-pocket expenses.

 

You do know MA plans are networks and usually only cover certain geographic regions. So if you’re visiting the grandkids or friends in another state expect to pay higher out of network costs if you need health care.

 

MA plan deductibles and co-pays are not guaranteed renewable and can change every year and even pull out of your geographical area. Or your doctor could decide to leave your network in the middle of the year and leave you scrambling for another doctor or plan. But don’t count on going to Original Medicare because those medigap plans will be there to underwrite you.


ReTiReD

 

Sorry but you are incorrect. You should very carefully check facts before posting:

  • On the first point you are totally 100% wrong. $6700 is NOT the average MOOP under a public Part C health plan; $6700 is by law the MAXIMUM MOOP. Maximum does not equal average. But $6700 is the typical MOOP on some zero premium plans that are not that popular (and if you choose a zero premium plan of course you get all the other benefits of Part C and also "save" about $1000 a year; if you are disciplined enough to bank those savings, you'll more than cover the MOOP in the well under 1% chance you ever reach a MOOP in any one year of the average 17 years that you are on Medicare)
  • As I wrote in chrono comment 3 the average MOOP for a public Part C plan that costs around $70 (that's a key part of my one example that you took out of context just as you took the whole Part C example out of context from the other three examples in chrono comment 3) in 2017 is around $3000. You are right that the average MOOP has steadily increased because of the so-called "cuts" made by Obamacare to the public Part C Medicare program but you are totally wrong that all MOOPs are $6700.
  • In fact the average of all MOOPs... in all the Part C plans (which are not all Medicare Advantage plans), including those that range from zero to over $200 in monthly premiums... all over the country no matter what the healthcare costs in the different regions... is only around $5000 in 2017, NOT $6700 (the word "average" really seems to throw people on this AARP Medicare and Insurance community for a loop even though buying insurance is all about playing the averages; go figure)
  • Even then it is very very unlikely that one major health problem or accident would run anyone on Part C up against a MOOP. The average Part-A hospital co-pay under Part C is under $1000, less than on Part A even for many people who also have private Medigap insurance. The average Part A SNF co-pay under Part C is better than on Part A with Medigap since the price goes to zero after a few weeks whereas on Part A with a private Medigap plan the price after a few weeks goes up. A MOOP is the most you can spend, not a deductible as unscrupulous insurance agents try to tell seniors. Just the opposite, those that face MOOP issues tend to have ongoing chronic illnessess. So all they have to do is pay more each month in Part C premiums and get Part C plans with lower MOOPs (these tend to be people on Part C PACE and special needs plans, not on vanilla public Part C Medicare Advantage)
  • It is a total 100% lie that you have to pay out of network prices if you have an emergency medical need under Part C when visiting the grandkids; typical lefty senior hate speech from the lefty political groups like AARP, CMA, Kaiser Insurance, MRC, NCSSPP, the Urban Institute and the like.
  • Furthermore people do not sign up for managed, networked Medicare and then go out of network. This is a typical far lefty "Big Lie" -- like claiming someone is proposing Medicare vouchers when the last one to make that claim was a Democrat Socialist... in 1981 --  from the lefty political groups like AARP, CMA, Kaiser Insurance, MRC, NCSSPP, the Urban Institute and the like. With the exception of Kaiser, they all hate the fact that seniors have the choice of managed, networked care (Kaiser is the third largest sponsor of managed, networked Part C health palns and its lies are just typical marketing trying to hurts its Part C competitors)
  • Despite what Obama, Pelosi (but not Schumer), Sanders, Warren, the AARP, CMA, Kaiser Insurance, MRC, NCSSPP, the Urban Institute and the like claim about public Part C Medicare, we seniors who are on Part C are not stupid dupes of the insurance industry. First, despite your typical lefty insult, most of the 20,000,000 of us on Part C have been in managed care our whole lives and know how it works. Being on Part C for us has nothing to do with Medicare. Second, most of our Part C plans are sponsored by integrated health delivery systems and charities, not by Obama's supposed blood-sucking insurers (even as he built his plan for people under 65 all around blood-sucking insuers--hypocrites or what?).
  • And finally in my state and at least 20 others, if I ever choose to leave Part C, I have continuously open, guaranteed issue Medigap (in my state it is even community rated so if that happens when I'm 80 -- which I can see happening in five years because my doctor will have retired -- I get to pay the same Medigap premium as a 65 year old). Of course, this last point is unfair. But in reverse it is unfair today that I, on Part C, am getting only $96 out of the Medicare Trust funds on average whereas my best friend on Medigap and my cousin on group retiree insurance is getting $100. So it all evens out in the long run, which is where we're all going
Valued Social Butterfly
Posts: 8,793
Registered: ‎08-18-2008

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

[ Edited ]
Message 45 of 59 (308 Views)

@ReTiReD51

 

As to your 1st reply on asset recovery - you are generally right in your description, problem is a lot of states no longer do it - and if they do, it just goes right back into their own specific Medicaid general funding.

 

It seems to me that if states could follow through on this and used these collected funds specifically for subsidized nursing home care/ home care or assisted living care - the eligibility could be widened somewhat.  They have ways to collect, I.e. putting a lien on the home - payable when title changes.  

 

I have even known people who have never changed the deed on their deceased parents home because of this and it creates huge legal and tax problems down the road.

 

Here is a comparison of the following subject tax plans by the Institute of Taxation and Economic Policy:

 

Institute of Taxation and Economic Policy - Tax Reform Plan Comparison

 

Ryan Plan, Trump Plan and Trump's Modified Plan ( at least one of them)

 

There is an increase in the standard deductions, personal exemptions go away but there are also increases in the child tax credit and under one of them there is a dependent credit - some part of these, under one of these plans, are refundable credits - making them more valuable to the individual or couple than a deduction.

Recognized Social Butterfly
Posts: 870
Registered: ‎09-03-2011

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

[ Edited ]
Message 46 of 59 (329 Views)

GailL1 wrote:

ReTiReD51 wrote:

GailL1 wrote:

 


 

We will have to wait until next week to find out the details of the House plan.

 

Why was there no outcry about this ACA related tax change when it was put into place?

 


 

I remember from the Trump web site in early January 2016 before he was elected he recommended doubling the standard deduction, taking away the personal exemptions, and having only two filing statuses married and single as a part of his tax reform.

 

He proposed to eliminate the head of household, married filing separately and Qualifying Widow(er) with dependent child filing statuses.

 

Plus he wanted to eliminate the $4050 per personal exemption, don’t care if you’ve got 12 kids/grandkids or zero kids/grandkids.

 

Now if these ideas of his makes it into the house tax reform plan. I can see where many advocacy groups like AARP will join together to fight this plan.

 

If you stop and think about the many seniors who are caring for their grand kids in their home they won’t get those personal exemptions anymore. And the single grandparent won’t get the advantage of filing at the lower tax status as head of household.

 

Like you say we should find out next week what’s in this tax reform plan.

 

“Since his campaign he has advocated for eliminating the head of household filing status.”

https://nwlc.org/wp-content/uploads/2017/08/Eliminating-the-Head-of-Household-Filing-Status-Would-Hu...

 

I agree with you there are some not so perfect things in the ACA. But I hope you can agree with me there are some good things in there. It needs fixed.

Recognized Social Butterfly
Posts: 870
Registered: ‎09-03-2011

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

Message 47 of 59 (331 Views)

GailL1 wrote:

ReTiReD51 wrote:

@GailL1, in life there are some things we don’t plan for, they’re unexpected. I think most of us hope that when our time comes we just simply drop over dead and then they bury us. Sure the answers to a successful life plan is out there in a text book for all to read, but sometimes economics, and other life commitments can prevent us from developing the perfect plan for a gracious death.

 

As to my friend he’s an educated railroader who had the appropriate advice and planning in place as best that someone in their positon could manage. It was Dementia not necessarily the cancer was the primary reason he had to put his wife in a nursing home and I’m sure hospice was there. You ask some good questions. But you have to trust that his eyes were dotted and his tees were crossed when it came to his financial situation. It is what it is for him. You have to spend down your resources first before you expect any more help in paying those medical bills. That's what he was doing.

 

That few extra tax dollars received back from the IRS for those who meet the 7.5% threshold of income to itemize may not be enough to  be of any real help to my friend but to some seniors it helps to pay a month’s insurance premium or co-pay on a prescription.

 


Sure, things come up which we haven't planned on or never even thought about, that's why the social safety net is there.  But what I am telling you is that some states do not count retirement funds in total as assets especially if RMD have already began -'these states would count only the RMD amount as income and then only partially if it belongs to the healthier of the spouses.

 

Some 401K plans restrict withdrawals for those younger in age and still working, therefore that asset is not countable as funds that are accessible at all.

 

Yes, the spend down is there because we cannot help those with higher income.

Personally, I feel that is the reason the money is there - to help one or the other or both with whatever rise in cost.

 

States need to develop rules which not only help the spouse that is incapacitated but the one that has to carry on.  States have the right if they so desire to perform an asset recovery after all the involved parties are out of the picture either as a result of death or a change in circumstance, I.e. selling of the home.

 

 

If our plan is to "we just simply drop over dead and then they bury us", then we need to start advocating for people to be able to end it all in advanced planning.

That's another thing that advocacy groups often overlook as supporting efforts.

 

Fighting about tax reform in such an area of this will not help - a person in such a circumstance - it is not the minor tax savings that will help them but the overall cost of care and what happens during and after this period when they remain after losing a loved one and their income.  Planning helps otherwise we need some state/federal supportive laws to help people in such a circumstance.

  

I really shouldn’t be giving any information about this because this is very much beyond my ability to understand, and way over my head.

 

But here it goes I believe it’s called spousal impoverishment in my state. Where the state looks at the healthier spouse’s income as partially belonging to the incapacitated spouse but only a part of it like you stated.

 

And typically the state will perform an asset recovery after all parties have passed on but I’ve been told if it doesn’t go through probate it’s possible to pass a house onto a child without the state being aware of it. I don’t know how that works. But I don’t think it’s a part of the 5 year Medicaid Asset transfer rules either.

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

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

Message 48 of 59 (356 Views)

ReTiReD51 wrote:

GailL1 wrote:

 How does AARP see this as affecting people negatively especially when such a large standard deduction will be put in its place?

 

 

Gail, What happens if that pipe dream of doubling the standard deductions never comes to pass this year or they don’t make it retroactive to 01/01/2017?

 

What then? Millions of people over 65 would have to try and itemize deductions that exceed 10% instead of 7.5% of their adjusted gross income. An extra $100 in taxes returned to a senior who has high out of pocket medical and nursing home expenses can be a great relief and morale booster. It’s a drop in the ocean compared to the earned income tax refunds given to taxpayers under 65.

 


We will have to wait until next week to find out the details of the House plan.

 

But as far as this change of going to 10% of AGI for those over 65 - it will most likely hit the higher incomes most.

 

Motley Fool 03/2017 - The Average American's Tax Deductions by Income

 

Remember this medical expense deduction includes not only actual medical expenses NOT paid for by insurance but also insurance premiums which are paid out of their pocket - health insurance and longterm care.

 

Why was there no outcry about this ACA related tax change when it was put into place?

 

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

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

Message 49 of 59 (333 Views)

ReTiReD51 wrote:

@GailL1, in life there are some things we don’t plan for, they’re unexpected. I think most of us hope that when our time comes we just simply drop over dead and then they bury us. Sure the answers to a successful life plan is out there in a text book for all to read, but sometimes economics, and other life commitments can prevent us from developing the perfect plan for a gracious death.

 

As to my friend he’s an educated railroader who had the appropriate advice and planning in place as best that someone in their positon could manage. It was Dementia not necessarily the cancer was the primary reason he had to put his wife in a nursing home and I’m sure hospice was there. You ask some good questions. But you have to trust that his eyes were dotted and his tees were crossed when it came to his financial situation. It is what it is for him. You have to spend down your resources first before you expect any more help in paying those medical bills. That's what he was doing.

 

That few extra tax dollars received back from the IRS for those who meet the 7.5% threshold of income to itemize may not be enough to  be of any real help to my friend but to some seniors it helps to pay a month’s insurance premium or co-pay on a prescription.

 


Sure, things come up which we haven't planned on or never even thought about, that's why the social safety net is there.  But what I am telling you is that some states do not count retirement funds in total as assets especially if RMD have already began -'these states would count only the RMD amount as income and then only partially if it belongs to the healthier of the spouses.

 

Some 401K plans restrict withdrawals for those younger in age and still working, therefore that asset is not countable as funds that are accessible at all.

 

Yes, the spend down is there because we cannot help those with higher income.

Personally, I feel that is the reason the money is there - to help one or the other or both with whatever rise in cost.

 

States need to develop rules which not only help the spouse that is incapacitated but the one that has to carry on.  States have the right if they so desire to perform an asset recovery after all the involved parties are out of the picture either as a result of death or a change in circumstance, I.e. selling of the home.

 

 

If our plan is to "we just simply drop over dead and then they bury us", then we need to start advocating for people to be able to end it all in advanced planning.

That's another thing that advocacy groups often overlook as supporting efforts.

 

Fighting about tax reform in such an area of this will not help - a person in such a circumstance - it is not the minor tax savings that will help them but the overall cost of care and what happens during and after this period when they remain after losing a loved one and their income.  Planning helps otherwise we need some state/federal supportive laws to help people in such a circumstance.

 

 

 

 

 

 

 

 

 

Recognized Social Butterfly
Posts: 870
Registered: ‎09-03-2011

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

Message 50 of 59 (337 Views)

byrondennis wrote:


 

  • -- About 30% of we seniors buy public Medicare Part C premium support health plans. We are typically middle class and lower middle class, but our out of pocket medical-services expenses are capped by public Part C, usually at around an average $3500. If we paid the average $70 for the Part C plan with a $3500 MOOP and the average Part B premium, we paid about $2000. On the other hand if we took a risk and chose a zero-premium Part C plan, we have lower premium costs and a higher MOOP limit  but the two amounts come out the same on average BUT ONLY IF WE HAVE A BAD YEAR. 

 

 

byrondennis you never let an opportunity go by to wholesale a Medicare Advantage plan.

 

$3500 out-of-pocket? Maybe in 2007 but today’s 2017 MA out of pockets average try $6700. So one major health problem or accident could set you back $6700 plus if you’re out of network and responsible for higher out-of-pocket expenses.

 

You do know MA plans are networks and usually only cover certain geographic regions. So if you’re visiting the grandkids or friends in another state expect to pay higher out of network costs if you need health care.

 

MA plan deductibles and co-pays are not guaranteed renewable and can change every year and even pull out of your geographical area. Or your doctor could decide to leave your network in the middle of the year and leave you scrambling for another doctor or plan. But don’t count on going to Original Medicare because those medigap plans will be there to underwrite you.