Support for Spousal Caregivers

 

 

 

Statement of the Well Spouse Association

To An

Open Executive Session

of the

Senate Committee on Finance

to

Consider an Original Bill Entitled the

Tax Cuts and Jobs Act

On

Monday, November 13, 2017

 

 

Submitted by:

Well Spouse Association

 

63 West Main St, Suite H

Freehold, NJ 07728

wellspouse.org

 

 

 

Thank you for this opportunity to present the views of the Well Spouse Association on the Tax Cuts and Jobs Act.

The Well Spouse Association is the only national organization of spousal caregivers.  Our members care for ill and disabled spouses with a wide variety of serious chronic illnesses, disabilities and severe medical conditions such as multiple sclerosis, Parkinson’s, ALS, stroke, traumatic brain injury, spinal cord injury, cancer, and more.

The Well Spouse Association urges you to remove repeal of the Affordable Care Act individual mandate from the Tax Cuts and Jobs Act before it is voted on by the Senate, and to vote against final passage if this damaging provision is not removed.

The Well Spouse Association also urges you to retain the medical expense deduction, which the House of Representatives voted to repeal on November 16, and to vote against passage of any tax bill that repeals this deduction.

 

The Well Spouse Association is very worried about the fate of the medical expense deduction. We are relieved that at this writing, the Senate version of the tax bill retains this deduction, but we are deeply concerned that the House has adopted a tax bill that would repeal it. For Well Spouses and our families, preserving the medical expense deduction, which has been a feature of the U.S. Tax Code since the early 1940s, is vital.

This deduction is of particular importance to millions of chronically ill and disabled people and their households.  As Well Spouse Association members know only too well, the cost of long-term care—whether at home or in a nursing home—can be financially catastrophic.  Home health aides, durable medical equipment, accessible vans, medical supplies, medical transportation, medical insurance premiums, co-pays and deductibles for drugs, doctor visits, physical, occupational and speech therapy not fully covered by insurance, and on and on — these expenses consume a huge portion of many Well Spouse family budgets.  Medicare specifically excludes coverage for most long-term care, as do most private and employer-provided medical insurance policies—leaving only long-term care insurance, which is expensive, riddled with exclusions, and typically cannot be purchased at any price for persons who have “pre-existing conditions.” (The ACA protections against discrimination based on pre-existing conditions do not apply to long term care insurance.) 

For Well Spouses with large medical expenses whose financial resources have not yet been depleted enough to qualify them for Medicaid, preserving the tax deductibility of medical expenses is urgent. It simply is not fair to require families who are shouldering a huge, often crushing medical expense burden to face sharply higher taxes as the result of a law whose stated purpose is to cause most other Americans’ taxes to go down.

The following powerful statements from our members express the concerns of the Well Spouse Association very well:

“There are many families quietly struggling with the challenges of a severe chronic illness or disability who are justifiably dismayed at the prospect of losing the medical expenses tax deduction.  Few who have not experienced this situation can fathom its financial impact on middle class families.

My family is one of them.  My husband had a spinal cord injury at age 22, rendering him paralyzed from the shoulders down.  He was fortunately able to have a career with the federal government, due to its pioneering policies on employing the disabled (even pre-ADA), despite his immobility and need for assistance with all physical tasks. 

Despite having a good health insurance policy, our co-pays for frequent lengthy hospitalizations, a custom-made breath-controlled power wheelchair and its repairs, and medical supplies and equipment are extremely high every year.  The cost of a van adapted for his wheelchair was exorbitant. Costs for a certified nurse's aide to help with his care are viewed by our health insurance plan as "custodial" and must be fully shouldered by us. Insurance coverage for home visits from a RN for specific medical issues has diminished over the years to a token number of visits.  This often leaves family members bearing the brunt of the care, even when skilled nursing tasks are required. Although I do the bulk of my husband's care myself, last year 55% of our income went to medical expenses. 

My family has been facing these challenges for decades. If our society is not going to support caregivers with stipends for lost income due to caregiving responsibilities, or with better insurance coverage for those catastrophically injured, it should at least have enough compassion to retain the medical expenses tax deduction. My husband has had the remarkable tenacity to hold a job (and pay taxes) despite his severe disability. The medical expenses deduction is a necessary and reasonable accommodation for those like him who are in extremely difficult situations.”

Another Well Spouse member reported the following:

“Over 18 years ago, my husband at age 59 suffered a severe stroke that robbed him of his speech and mobility.  It also affected his thinking and emotions.  He could not be left alone and needed help with many functions of daily life.  I hired caregivers while I was at work and took care of him myself when I was home.  Three years ago, he had a second stroke and now requires care seven days a week, 24 hours a day.  His care at home now costs over $250,000 a year.  Experts have told me that because of his many health issues, fees in a nursing home would probably cost about $180,000 a year. In 2016, his nursing expenses exceeded our income.

Although, we might once have considered ourselves upper middle class, the medical expense tax deduction has been essential to my ability to provide for his care.  As we draw down our assets, it becomes even more essential as I fear running out of money.  Tax cuts for corporations and the wealthy should not come at the expense of the most vulnerable—those who need nursing care at all income levels.”

A third member shared her story with The Washington Post’s Michelle Singletary this month:

 “My husband had a neurodegenerative condition (FXTAS) which rendered him totally disabled both mentally and physically within five years of our 17-year marriage.  I cared for him at home until his death last year.  I employed home health aides for about 10 hours a day to help me care for him.  I could not work because my husband needed my full-time care, in addition to the aides I employed.  I loved my husband and was determined to keep him at home with me.  We were fortunately able to afford the aides, because I was very careful with the money we had, and BECAUSE I WAS ABLE TO DEDUCT THESE EXPENSES TO LOWER MY INCOME TAX BILL.  I paid about $7000/month out of pocket for over 10 years, which is still less expensive than a nursing home would have been.  There were many other medical expenses not paid for by insurance which I paid out of pocket, but was able to deduct from income taxes.

 

There are many, many family caregivers in this situation. Their medical expenses also include home adaptive renovations, HEALTH INSURANCE, handicap equipment, doctor and drug expenses not covered by insurance, and more.  Family caregivers SAVE the government $470 billion dollars a year, it is estimated, by not accessing Medicaid.  Family caregivers are caught between astronomical expenses and in many cases, the inability to work because of the caregiving demands.”

 

We add that less money will be saved by repealing the medical expense deduction than House Republicans apparently think. Many households will be pushed into poverty sooner, and therefore into Medicaid eligibility, as a result of repeal. When that happens, many who have been caring for loved ones at home out-of-pocket will be forced to place them in nursing homes, at even greater cost to Federal and state governments. In order to make ends meet, many households who treat their home health aides appropriately and lawfully as W-2 employees in order to document their tax deduction may elect to pay them under the table, thereby cutting Federal revenues even more. 

 

The Tax Cut and Job’s Act’s repeal of the Affordable Care Act (ACA) individual mandate is another serious problem. For many Well Spouses, the ACA is a lifeline. Often our ill spouses were stricken at a young age while in the prime of life. Their earnings capacity and ability to work, and ours as spousal caregivers, has been greatly diminished at the worst possible time, in light of the financial resources required for their long-term care.  Key provisions of the ACA have been crucial for us, such as its prohibition against insurance company discrimination based on pre-existing conditions and lifetime and yearly insurance caps.

The ACA is far from perfect, but the solution is to improve it, not repeal such a key provision as the individual mandate.  The individual mandate is one of three legs of the ACA stool, along with prohibition of insurance company discrimination against people with pre-existing conditions and Federal subsidies to enable low-income people to afford insurance. Take away any one of these legs, and the stool falls. Repeal of the individual mandate will destabilize insurance markets, drive up premiums for millions of sicker, disabled and older Americans, and (according to CBO) result in 13 million fewer Americans having medical insurance coverage.  According to the latest public health research, this decline in coverage will cause thousands of excess, preventable deaths every year. For spousal caregivers, this is no abstraction. It is all too real. It is deeply immoral to treat the savings from repeal of the individual mandate as a "piggy bank" to fund tax cuts primarily for the benefit of corporations and the wealthiest taxpayers.

 

We therefore urge you to retain the medical expense deduction and the ACA individual mandate, and to vote against any tax bill that does not do both.

Thank you for this opportunity to present the views of the Well Spouse Association on the Tax Cut and Jobs Act.

 

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Address

63 West Main St, Suite H
63 West Main St, Suite H
Freehold, NJ 07728
Freehold, NJ 07728
Phone: (800) 838-0879
Phone: (800) 838-0879