Middle-income people get help with long-term health care expenses

Posted: Thursday, August 01, 2002

Health problems can be of particular concern to middle-income Americans, those people who aren't poor enough to qualify for government help and aren't rich enough to pay for the necessary care or have inclusive coverage from health-care plans.

Doctors' bills, hospital bills, prescription-drug costs -- those are just a few of the worries that people see gnawing at their retirement income. But the U.S. House of Representatives took a major step Thursday toward easing the fears of middle-income people when it comes to long-term health care.

By 362-61, the House OK'd a tax deduction that would help middle-income people mitigate the expense of insurance for long-term health care such as a nursing home. The taxpayer, his or her spouse or a dependent would be eligible for the break.

For this purpose, middle income is defined as $20,000 to $40,000 for individuals and $40,000 to $80,000 for married couples filing jointly. Also, the taxpayer would have to pay at least half of the insurance premiums.

Although premiums for long-term health care can currently be deducted for income-tax purposes, the taxpayer must itemize and the premiums must be part of total medical expenses that add up to at least 7.5 percent of income.

The new legislation would allow deductions without itemizing.

How important is this measure? That can be seen in what it will cost the government in lost revenues over 10 years -- $5.3 billion. That's money that people needing expensive long-term care can hardly afford to lose.

The Senate, where the bill heads next, should give this measure favorable consideration.

-- El Paso Times

July 26

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