Hi Rhoder19,
I haven't thought about this topic for a year and didn't have to because my mom no longer receives long term care benefits. However, I thought I'd chime in to get closure.
I'm with you on this. It comes down to whether the long-term care benefits are considered reimbursements or not. If they are reimbursements then those reimbursements reduce the $$$ deductible as medical expenses. Before (in prior post), you had argued that they are not in fact reimbursements ... and your argument had resonated with me, but it sounds like that argument has been shot down. The end result (to me) is that long term care benefits are EFFECTIVELY taxed by virtue of a loss in deductions.
I will add that this EFFECTIVE tax is substantial when considering the $$$ spent on long term care. My mom's taxable income substantially less this year than last.
To conclude, as far as the $100. Yes, $100 was received in benefits. And, one then gets $100 back as a "reimbursement". So, yeah, not being able to deduct as medical expenses seems fair. However, if one looks at this differently ... where the $100 is a pay out from years of prior long-term care premium payments (and not a reimbursement), then not being able to deduct medical expenses seems unfair, i.e. a "pisser". That's my perspective for what it is worth. I would add that because my mom's benefits were "capped" by the state (by virtue of LTC company bankruptcy), it makes the benefits seem more like a payout vs a reimbursement.
