Right. For every $1,000 of taxable Roth conversion, your medical-expense deduction would drop by $75, increasing your taxable income by $1,075, until either the medical-expense deduction reached zero or your itemized deductions dropped below the standard deduction.
If you receive Social Security benefits, the increase in AGI could also increase the taxable amount of these benefits that can potentially multiply the 12% tax rate up to 22.2%, a much greater effect than the change in the medical-expense deduction.
It's best to do a simulated tax return with your expected income to get an accurate estimate of how much you are willing to convert to Roth. The CD/download version of TurboTax is easiest to use for such what-if analysis. The online version can be used, but you'll need to establish a separate test account for the purpose and you won't have visibility to the details of the calculations, only to Form 1040 and Schedules 1 through 3.
