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November 14, 2017

How the Tax Cuts and Jobs Act Could Affect Continuing Care at Home Members

Several provisions in the proposed Tax Cuts and Jobs Act will significantly impact members of continuing care at home.

 Two are particularly significant:

The elimination of itemized medical deductions. If this stays in the final bill and the legislation passes, you will lose your ability to deduct a large portion of your monthly fees. Last year, Kendal at Home members were able to deduct 100% of membership fees and over 60% of monthly fees as pre-paid medical expenses.

The elimination of tax-exempt interest on bonds for not-for-profit organizations and the elimination of “advanced refunding” provisions on existing debt. Like virtually every NFP CCRC, Kendal communities are financed with lower-interest tax-exempt bonds. This is almost always the case when not-for-profit CCRCs do major renovations or expansions, and when new communities seek to develop and build.

The chilling effect of the elimination of tax-exempt interest for organizations such as Kendal almost certainly will hurt development, renovations and expansions for CCRCs across the country.

It is important to remember that seniors who join programs like Kendal at Home are self-funding their long-term care — and reducing the burden on the Medicaid system — which finances nursing home and nursing home-diversion care for many seniors who have not elected to secure their own retirement years in the way you did.

What Can You Do?

There are several things you can do to make a difference.

  • Get more information on the legislation by reading LeadingAge’s statement
  • Express your concerns to lawmakers by calling 1-855-837-6894. LeadingAge has set up this toll-free number to connect you directly to their offices.

You can use one of these scripts when calling:

Script 1

“I am calling today about the proposals contained in HR 1, the tax reform bill. I am very concerned that the bill in its current form eliminates private activity bonds, which many of Ohio's nonprofit providers of senior services rely on to secure financing to strengthen and expand the services they offer to the older adults in their communities. Eliminating these important finance tools will pass on hundreds of thousands of dollars of expense to those serving the elders in their communities.

For example... [Insert specific details here for your organization/community, if you have them.]

I am also worried that it eliminates the medical expenses deduction, which many seniors use to offset the costs of their healthcare. Seniors pay a higher portion of their budget for healthcare than the general population, so this will affect them disproportionately.

For example... [Insert specific details here for your organization, if you have them.]

Script 2

"My name is _______ and I am a constituent. I urge Representative/Senator ____ to oppose provisions of H.R. 1, tax reform legislation that would eliminate the medical expense deduction.

Also, please preserve tax-exempt financing for the development and preservation of affordable senior housing and retirement communities, which would be eliminated under H.R. 1.

I hope Representative/Senator ____ will stand up for older adults and protect these crucial tax benefits for seniors and middle-income families."

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