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COVID-19 Package Includes Collins, Cantwell Provision to Make Medical Expense Deduction Permanent

Washington, D.C. – U.S. Senators Susan Collins (R-ME) and Maria Cantwell (D-WA) announced that a provision they pushed for to assist families who are struggling to afford high medical costs was included in the government funding legislation that passed Congress and will now be signed into law.  Companion legislation was sponsored in the House of Representatives by Representatives Katie Porter (D-CA) and David Schweikert (R-AZ).  


For those households that spend more than 7.5 percent of their income on medical expenses, this provision, which is based on the Medical Expense Savings Act, Senators Collins and Cantwell introduced in 2019, will allow them to continue to deduct these costs from their tax bill.


Millions of Americans rely on the medical expense deduction.  The burden of high medical expenses falls disproportionately on seniors and those with disabilities.  The medical expense deduction is vital for those who have pre-existing medical conditions, suffer chronic medical conditions, experience unexpected illnesses or injuries, or face costs for long-term care services that are not covered by insurance.


“The medical expense deduction is a lifeline for Americans struggling with high medical costs, particularly seniors and individuals with disabilities,” said Senator Collins.  “By making this deduction permanent, our legislation will help provide certainty for those with pre-existing conditions and support millions of Americans with large medical bills.”


“The medical expense deduction provides much-needed financial relief for Americans with high medical bills, including seniors and individuals with disabilities.  The extension we secured is critical for more than 200,000 Washingtonians who claim the deduction in order to lower their health care costs and help pay for unexpected medical expenses and life-saving treatment,” said Senator Cantwell.


"The signing of this bill is a victory for the millions of Americans with high out-of-pocket medical expenses,"Congresswoman Porter said. "By making it easier for people to use the medical expense tax deduction, we're delivering much needed help to the far too many Americans facing out of control healthcare costs, including older adults, people with disabilities, and people with chronic illnesses."


“I am very pleased to see Congress provide critical relief to taxpayers by permanently reducing the medical expense deduction income threshold,” said Representative Schweikert. “The pandemic has brought on unprecedented challenges, and this legislation takes an important step forward in helping hard-working Americans, particularly seniors and individuals with chronic conditions or disabilities, afford their health care expenses. I am proud to be a part of this effort, and look forward to continuing to work with my colleagues to advance solutions to reduce the cost of health care.” 


“AARP applauds Congress for making permanent the 7.5% threshold on medical expenses. This effort has been long in the making. On behalf of the approximately 4.4 million Americans with high health care costs who rely on this deduction, we thank Senator Collins and Senator Cantwell for their bipartisan leadership in the Senate on this important issue,” said Megan O’Reilly, Vice President of Government Affairs at AARP.


Senators Collins and Cantwell have long been supporters of the medical expense deduction.  AARP estimates that nearly 20,000 Mainers already benefit from this deduction.  In the Tax Cuts and Jobs Act, Senator Collins secured a provision that provides deductions of medical expenses exceeding 7.5 percent of adjusted gross income (AGI) for taxpayers filing in 2017 and 2018, instead of 10 percent of AGI.  Following Senators Collins and Cantwell’s advocacy, another extension of this provision was secured last year, extending the deduction to the end of this calendar year.  Earlier this year, Senator Collins sent a letter to Senate Majority Leader Mitch McConnell calling for extending the medical expense deduction as part of the next COVID-19 relief package.