March 25, 2019

Your Money: Washington Gridlock? Maybe Not on These Personal Finance Issues

Though the idea has received some bipartisan support, critics aren’t optimistic that dangling a tax credit in front of employers will go far enough. Anna Chu, vice president for strategy and policy at the National Women’s Law Center, said tax credits rarely prodded businesses — particularly those that employ lower-income workers — to create a new benefit.

“What happens is you are simply rewarding businesses who are already doing this,” she said.

The problem it could help solve: Ever-rising out-of-pocket health care costs.

What it would mean for you: When they began to rewrite the tax code last year, Republicans’ opening gambit was to do away with tax deductions for medical expenses. But that prompted howls of outrage from people with disabilities, parents of special-needs children and older Americans (whose nursing home costs are generally deductible).

Republicans reversed themselves, and then some: The final bill allows people to deduct any such costs that exceed 7.5 percent of their adjusted gross income; the previous threshold was 10 percent.

There is a catch, though: That 7.5 percent was only for 2017 and 2018. Next year, absent legislative action, the hurdle will revert to 10 percent. If that happens, it will feel uncomfortably like a tax increase on the old and the sick. So look for a compromise here, too.

The problem it could help solve: While the Affordable Care Act generally caps what consumers must spend out of pocket when using providers in their plan’s network, it doesn’t protect consumers from large bills from outside providers. Those providers may be free to charge the consumer for the balance of the bill that the insurer did not pay, known as balance billing. In some cases, those charges can run into six figures.

What it would mean for you: A proposed bill with bipartisan support would help patients in a few different situations. For example, you’d be responsible only for what you would pay under your insurance plan when treated for an emergency by an out-of-network provider at an out-of-network facility. The same logic would apply if you were treated at a hospital in your plan’s network but saw a doctor who was out of network.

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