Barbara Kim Stanton
Hawai‘i Herald Columnist
Nobody likes paying taxes, and paying less is generally better than paying more.
But the tax cuts before Congress will cause many seniors to pay more in taxes and will cause some seniors to lose — or pay more — for their health insurance. It could also lead to a $25 billion cut to Medicare beginning next month.
That’s because the Tax Cuts and Jobs Act will increase the deficit by about $1.5 trillion over the next 10 years. What we’re afraid of is that kupuna (elders) and our children will end up paying for the deficit caused by the tax cut.
The large increase in the deficit will inevitably lead to calls for greater spending cuts, which are likely to include dramatic cuts to Medicare, Medicaid and other important programs servicing older Americans.
The $1.5 trillion federal deficit triggers a $25 billion cut in Medicare in fiscal 2018 and additional cuts in later years, unless Congress acts to waive the automatic cuts before the end of the year.
AARP estimates that the Senate version of the Tax Cuts and Jobs Act will increase taxes on 1.2 million taxpayers age 65 and older in 2019 and that by 2027, 5.2 million older taxpayers will experience higher taxes.
The Senate, thankfully, did not include a House provision to eliminate the medical expense itemized deduction. The medical expense deduction provides critical financial protection for seniors with high health care costs. Nearly three-quarters of tax filers who claimed the medical expense deduction are age 50 or older and live with a chronic condition or illness. Additionally, 70 percent of filers who claimed the deduction have incomes below $75,000.
AARP also opposes repeal of the individual mandate for the Affordable Care Act, which will increase costs and result in 13 million fewer Americans covered by health insurance. The nonpartisan Congressional Budget Office estimates the provision will cause premiums in the health insurance marketplace to rise by 10 percent — that’s an average of $1,490 for a 64-year-old.
The Senate and House passed different versions of the Tax Cuts and Jobs Act. A conference committee will reconcile the differences and what comes out will be voted on again. AARP Hawaii urges seniors to call their Congressional representatives and let them know how you feel about the bill. If you have friends and family in other states, have them call their senators and representatives and urge them to vote “no” on any bill that threatens Medicare and increases costs on seniors.
AARP has set up a toll-free number to call your senators at 1-844-502-4371. You can also go online to action.aarp.org/ProtectMedicare to send an email to Congress to tell them not to cut Medicare.
As we did with the last major effort at tax reform a generation ago, AARP is prepared to support tax legislation that makes the tax code more equitable and efficient; promotes growth; and produces sufficient revenue to pay for critical national programs, including Medicare and Medicaid.
Unless drastic changes are made to the Senate and House conference bill to give real tax relief for the working middle class and protect Medicare and Medicaid, the bill will not meet AARP’s standards.
Barbara Kim Stanton has been the state director of AARP Hawaii Hawaii since 2005. She writes about living a life of real possibilities, where age is not a limit and experience equals wisdom.