With huge expenses mounting because of her husband’s Alzheimer’s Disease, San Francisco Bay Area resident Linda Winter depends on the medical tax deduction to alleviate some of that pain.
She and others in the same situation were stunned by the Republican proposal to eliminate that deduction.
Health insurance companies already won’t pay the round-the-clock care her husband needs. The aid he needs for eating, bathing and other daily tasks is considered custodial care and not skilled nursing care, which is covered.
“How could you take this health care deduction away?” she said. “It’s so uncompassionate. It’s so unjust. People don’t realize the desperate situation that Alzheimer’s patients are in.”
The House on Thursday approved the elimination of the medical deduction and most other deductions beginning in 2018 as part of its mammoth tax overhaul bill. The Senate now will take up its own bill and then both chambers will have to resolve the differences. The President would have to sign it before it could go into effect.
Republicans say they are helping most people by simplifying the tax code, doubling the standard deduction and increasing the child deduction. But health advocates say their main objective is to give a tax break to the wealthy and corporations.
Alzheimer’s is a type of dementia that causes gradually worsening problems with memory, thinking and behavior. The Alzheimer’s Association says it’s the most expensive disease. The association says that in the last five years of life, the costs of a person with dementia, on average is more than $287,000 compared to $175,000 for someone with heart disease and $173,000 for someone with cancer.
In America, about 5.4 million people over 65 have the disease, including 630,000 people in California.
Winter, who has a well-paying director job with a Fortune-500 company, is struggling to pay the $9,600 a month needed for her husband’s care in a facility. “That’s not covered by insurance at all, which is incredible to people,” she said. “I have great insurance through my work. Short of any medications or doctor visits, it doesn’t cover anything at all.”
Medicaid, a federal and state program, will cover nursing care but only for people with very low income, and Winters doesn’t qualify. Moreover, not every center takes Medicaid, called Medi-Cal here. In any case, Medicaid too is threatened by the tax bill. According to Anthony Wright, executive director of Health Access California, the bill will force cuts to Medicaid and Medicare, the federal program that provides health insurance for those 65 and older, because it opens up a $1.5 trillion hole in the federal budget.
What’s striking about Alzheimer’s compared to other diseases is that sufferers can live a long time while their brains deteriorate. On average, they live around eight years with the disease but it can be as long as 20, said Michele Boudreau, communications director for the Alzheimer’s Association, Northern California and Northern Nevada.
Jon Lucas’ wife was diagnosed with the disease in 2010 when she was 56 and has been living in a care facility in Los Gatos since 2013. It costs him more than $7,000 a month for his wife to have a shared room. He estimates that he has paid $350,000 out of pocket for her care to date.
Lucas said he was fortunate in that he had a well-paying job as an operations director at National Semiconductor and he was able to retire early soon after his wife’s diagnosis. He also had inheritance money that could help cover the costs of caring for his wife.
For the first couple of years, Lucas did most of the care because he wanted to be close to his wife, who was his high school sweetheart. But eventually it became overwhelming. She resisted caregivers he hired to help him, would sometimes not change her clothes and often wouldn’t sleep through the night. Lucas became more depressed and finally, he decided to make a change. He calls it the hardest decision he ever made.
“It’s probably the guilt because you know she would never want to live in a place like that,” he said about why it was hard. “At the same time, you know you can’t do it anymore. You feel like a failure. A lot of times, the caregiver dies before the person with the disease. I knew I was headed down that path.”
He said eliminating the medical tax deduction would be very bad. “With the little income I have from investments, the deductions offset that,” he said. “Not just for myself but for anyone else dealing with this, any way you can get money and not pay more taxes, helps. You can barely afford to stay afloat with the costs.”
Currently, people are allowed to deduct qualified medical expenses that exceed 10 percent of their adjusted gross income for the year. Adjusted gross income is taxable income minus any other deductions.
Ruth Gay, chief public policy officer at the Alzheimer’s Association, Northern California and Northern Nevada, said the medical deduction is a catastrophic cap. It’s for people who are spending huge amounts on medical expenses. “For these people, it makes a big difference,” she said.
San Jose resident Kim Steppe said she generally paid $10,000 a month for her husband during the five years he was in a care facility and at least two months, that figure was $25,000 because of extra care he needed.
Her husband was diagnosed with Alzheimer’s in 2005 when the couple’s daughters were 6 and 8 and lived 10 years with the disease before he died. Steppe cared for him at home the first five years but moved him to care facility when he became more irritable and difficult to manage.
“It was a struggle for me,” she said. “I had to dip into the girls’ college savings. I’m not sure how I did it, to be honest, and I had resources.”