Medical treatment is one of the most common forms of medical care that Medicare beneficiaries can use to lower their medical bills, but the federal government hasn’t set a minimum standard for how much doctors and hospitals can deduct from Medicare for treatments such as dental and vision.
Now a loophole in the tax code could allow a company to deduct that cost from the total cost of its Medicare plan.
The Tax Policy Center, a nonpartisan think tank, released a report Monday that found that companies can deduct the costs of medical treatments up to a maximum of $1,500 a month.
But a company can also deduct the full cost up to $2,500.
The report said that the law would likely result in medical care being used to treat Medicare beneficiaries for about $1.3 billion a year, a total that would be about twice as large as the amount of medical treatment that is used in other programs such as Social Security.
The Center said that some of the medical treatment deductions could be used to pay for treatment for the elderly and low-income people.
The loophole would also allow companies to avoid paying taxes on medical care if they have a separate business in which they are providing medical services.
The provision in question would allow a business that is self-insured and that is reimbursed by Medicare to deduct the cost of certain non-medical services from the Medicare fee schedule for those services.
This deduction would then be taxed at 15% on those costs, which the Tax Policy Centre estimated would be $1 trillion a year.
It also said that if the company had more than $50 million in annual revenue, it would be able to deduct $1 billion of those expenses.
The Center estimated that the provision could be exploited by a company that could take advantage of the loophole by claiming that its business is not a medical facility.
A medical facility would have to be subject to Medicare regulations, such as a requirement that all patients receive care, to qualify for this deduction.
If a business could claim that it is not involved in a medical entity, it could claim the deduction without having to provide any proof of that claim.
The amount of the deduction would depend on the company’s size, the number of workers and whether the business is a small or large business.
A similar provision has been in place since 2008, when the Medicare Advantage program was created.
The provision allows employers to deduct up to 20% of the cost for services they provide to Medicare recipients.
The IRS is expected to issue a final rule this fall on whether the loophole should be allowed.
“It’s a very simple loophole that is so broad and easy to abuse that it could easily be exploited, and it’s one of many, many that have been exploited over the years,” said Michael Biesecker, an analyst at the Tax Foundation.
“This is an example of the tax reform law being used as a cover for massive corporate tax cuts.”