Because of the federal income tax code, those who pay their health care insurance out-of-pocket are being treated unjustly. The ill-treatment has occurred for decades and recently has become worse, at least for those born after Jan. 1, 1949.
Regretfully, since the Internal Revenue Service does not recognize the insurance as a necessity, those who want to reduce their tax obligation must itemize their deduction when filing their tax returns.
When itemizing, the credit received for health care costs is not for the total amount, only a percentage. For example, a person who has an adjusted income of $50,000 and has paid $6,000 for insurance is credited only $1,000 — 16-2/3 percent of the amount spent. On returns filed last year, under the same circumstance, the taxpayer would have been credited for $2,500 or 37.5 percent.
If the credit allotted for health care, when added to the other itemized deductions does not exceed the standard deduction, the tax obligation to the Internal Revenue Service remains the same.
On the other hand, taxpayers, including members of Congress, who have their health care insurance paid by their employer — in reality — are given a deduction (adjustment to income) equivalent to 100 percent of the cost.
If Congress would authorize the insertion of “health care expenses” on page one of the 1040 Form, this injustice would be rectified. That is, no one would be paying taxes on the money that is used to pay for health care!
STEPHEN J. VEROTSKY