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For example, younger persons who are still working probably arenât on Medicare and are still paying into the system by a rate of 6.2% of their annual earnings. Elderly persons on Medicare can use the IRS tax deduction to reduce their tax burden by claiming costs associated with Medicare payments.
Under current law, the IRS allows individuals to deduct qualified medical expenses that exceed 10 percent of a personâs adjusted gross income for the year. The bill would repeal that itemized deduction, effective in 2018. The cost to repeal the medical expense deduction is about $10 billion per year.