Is a concierge medical fee deductible?

[Salmon Egg]

I am now going to a physician who requires an advance annual fee for his
service. This is above anything he gets as regular insurance payment. In
return for this fee he limits his practice to 600 or fewer patients. I
notice that wait times are much shorter and face times longer as a
consequence.

Is such a fee deductible if added in with other medical expenses in
excess of the 7.5% of AGI?

--

Sam

Conservatives are against Darwinism but for natural selection.
Liberals are for Darwinism but totally against any selection.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>

[Bill Brown]

On Monday, October 1, 2012 10:55:03 PM UTC-4, Salmon Egg wrote:
> I am now going to a physician who requires an advance annual fee for his
>
> service. This is above anything he gets as regular insurance payment. In
>
> return for this fee he limits his practice to 600 or fewer patients. I
>
> notice that wait times are much shorter and face times longer as a
>
> consequence.
>
>
>
> Is such a fee deductible if added in with other medical expenses in
>
> excess of the 7.5% of AGI?
>

I know of no reason why such a fee would not be deductible on Schedule A as a medical expense.

[Alan]

On 10/2/2012 7:28 AM, Bill Brown wrote:
> On Monday, October 1, 2012 10:55:03 PM UTC-4, Salmon Egg wrote:
>> I am now going to a physician who requires an advance annual fee for his
>>
>> service. This is above anything he gets as regular insurance payment. In
>>
>> return for this fee he limits his practice to 600 or fewer patients. I
>>
>> notice that wait times are much shorter and face times longer as a
>>
>> consequence.
>>
>>
>>
>> Is such a fee deductible if added in with other medical expenses in
>>
>> excess of the 7.5% of AGI?
>>
>
> I know of no reason why such a fee would not be deductible on Schedule A as a medical expense.
>

I'm not sure what the answer is. However, I can give you a reason why in
some circumstances it would not be deductible. The IRS could argue it is
nothing more than an advance payment, not deductible until the tax year
in which medical services are rendered.

[Stuart A. Bronstein]

Alan <temp...@vacationmail.com> wrote:

> Bill Brown wrote:
>> Salmon Egg wrote:

>>> I am now going to a physician who requires an advance annual
>>> fee for his service. This is above anything he gets as regular
>>> insurance payment. In return for this fee he limits his
>>> practice to 600 or fewer patients. I notice that wait times
>>> are much shorter and face times longer as a consequence.
>>>
>>> Is such a fee deductible if added in with other medical
>>> expenses in excess of the 7.5% of AGI?
>>
>> I know of no reason why such a fee would not be deductible on
>> Schedule A as a medical expense.
>>
> I'm not sure what the answer is. However, I can give you a
> reason why in some circumstances it would not be deductible. The
> IRS could argue it is nothing more than an advance payment, not
> deductible until the tax year in which medical services are
> rendered.

It's certainly not an advance payment. It's a flat, minimum payment
and is not for services to be rendered, but just for the right to be
that physician's patient. For lawyers this kind of arrangement is
known as a true retainer. I don't see a problem with it.

___
Stu
http://DownToEarthLawyer.com

[Alan]

On 10/3/2012 2:14 PM, Stuart A. Bronstein wrote:

> Alan <temp...@vacationmail.com> wrote:
>
> It's certainly not an advance payment. It's a flat, minimum payment
> and is not for services to be rendered, but just for the right to be
> that physician's patient. For lawyers this kind of arrangement is
> known as a true retainer. I don't see a problem with it.
>
> ___
> Stu
> http://DownToEarthLawyer.com
>

I wasn't aware that the right to see a physician meets the definition in
Sec. 213 and its regs for medical care. Until the person actually
receives something from the medical group that meets the definition of
medical care, the payment is no different than me paying a hospital on
12/31 for use of an OR for my upcoming surgery in January. You can't get
a deduction for prepayment of a future medical expense that may not happen.

[Stuart A. Bronstein]

Alan <temp...@vacationmail.com> wrote:
> Stuart A. Bronstein wrote:
>> Alan <temp...@vacationmail.com> wrote:
>>
>> It's certainly not an advance payment. It's a flat, minimum
>> payment and is not for services to be rendered, but just for
>> the right to be that physician's patient. For lawyers this
>> kind of arrangement is known as a true retainer. I don't see a
>> problem with it.
>>

> I wasn't aware that the right to see a physician meets the
> definition in Sec. 213 and its regs for medical care. Until the
> person actually receives something from the medical group that
> meets the definition of medical care, the payment is no
> different than me paying a hospital on 12/31 for use of an OR
> for my upcoming surgery in January. You can't get a deduction
> for prepayment of a future medical expense that may not happen.

It's not a prepayment, because there are no specific services it goes
to. It expires after a specified period of time whether it was used
or not. It's a payment for access, and you get the access
immediately.

Rather than being like paying for something to be used at a later
time, it's like paying for medication your doctor proscribes you to
use when you need it - if you don't need it, you don't take it, but
you still get the deduction for it.

___
Stu
http://DownToEarthLawyer.com

[Pico Rico]

"Stuart A. Bronstein" <spam...@lexregia.com> wrote in message
news:XnsA0E1A6B799B03s...@130.133.4.11...

> Alan <temp...@vacationmail.com> wrote:
>> Stuart A. Bronstein wrote:
>>> Alan <temp...@vacationmail.com> wrote:
>>>
>>> It's certainly not an advance payment. It's a flat, minimum
>>> payment and is not for services to be rendered, but just for
>>> the right to be that physician's patient. For lawyers this
>>> kind of arrangement is known as a true retainer. I don't see a
>>> problem with it.
>>>
>> I wasn't aware that the right to see a physician meets the
>> definition in Sec. 213 and its regs for medical care. Until the
>> person actually receives something from the medical group that
>> meets the definition of medical care, the payment is no
>> different than me paying a hospital on 12/31 for use of an OR
>> for my upcoming surgery in January. You can't get a deduction
>> for prepayment of a future medical expense that may not happen.
>
> It's not a prepayment, because there are no specific services it goes
> to. It expires after a specified period of time whether it was used
> or not. It's a payment for access, and you get the access
> immediately.
>
> Rather than being like paying for something to be used at a later
> time, it's like paying for medication your doctor proscribes you to
> use when you need it - if you don't need it, you don't take it, but
> you still get the deduction for it.
>

"you get access immediately" really is a theory, from the people I know who
have bailed out of such plans.

But, the plans I am familiar with give you more than just access; the fee
includes some services, such as an annual physical, some other sort of
consultations, etc.

[Alan]

I don't agree with you. Until you receive medical care, the fee you paid
for access is nothing more than a prepayment. Even if the fee covers
your first physical, until you get that physical, or meet with a doctor
or nurse or receive anything else that meets the definition in sec. 213
as medical care, you have made a nondeductible prepayment.
I don't see this as an issue as the person who pays the concierge fee
will no doubt receive medical care. My point is, you need to understand
that if you make that payment at the end of a tax year before you
receive any care, you won't be able to deduct it in that year.

[Stuart A. Bronstein]

Alan <temp...@vacationmail.com> wrote:

> My point is, you need to understand
> that if you make that payment at the end of a tax year before you
> receive any care, you won't be able to deduct it in that year.
>

I can certainly agree with that. But that's not what's going on in
OP's case. In his situation he is paying a flat fee, say at the
beginning of the year, for the privilege of seeing that particular
doctor during the year. The payment doesn't apply to anything after
the end of the year. (If the payment is not made at the beginning of
the year, I agree it should be pro-rated).

But it is a fee for the doctor being available during that year, and
it expires at the end of the year. If it's prepayment for services,
it is only for services rendered during the tax year and not in any
subsequent year.

___
Stu
http://DownToEarthLawyer.com

[Alan]

On 10/3/2012 7:26 PM, Stuart A. Bronstein wrote:
> But it is a fee for the doctor being available during that year, and
> it expires at the end of the year. If it's prepayment for services,
> it is only for services rendered during the tax year and not in any
> subsequent year.
>
> ___
> Stu
> http://DownToEarthLawyer.com
>

My point is that, if for any reason, you never receive any medical care
during the year as defined in sec. 213, then the fee you paid on 1/1 for
one year is nothing more than a personal nondeductible expense. Paying
someone to be "available" is not medical care. I don't expect anyone to
pay this fee for concierge medicine and not incur some medical care
which would make the fee deductible... probably (concierge fees has not
been adjudicated). Bill Brown said he knew of no reqson why the fee
would not be deductible. My reply says there is a reason if you never
receive any medical care for your concierge fee.

[Bill Brown]

On Wednesday, October 3, 2012 9:55:02 PM UTC-4, temp...@vacationmail.com wrote:
> On 10/3/2012 7:26 PM, Stuart A. Bronstein wrote:
>
> > But it is a fee for the doctor being available during that year, and
>
> > it expires at the end of the year. If it's prepayment for services,
>
> > it is only for services rendered during the tax year and not in any
>
> > subsequent year.
>
> >
>
> > ___
>
> > Stu
>
> > http://DownToEarthLawyer.com
>
> >
>
> My point is that, if for any reason, you never receive any medical care
>
> during the year as defined in sec. 213, then the fee you paid on 1/1 for
>
> one year is nothing more than a personal nondeductible expense.

By your logic, health insurance premiums are not deductible if you don't get sick that year.

I've read the posts in this thread and as I still know of no reason why such a fee would not be deductible on Schedule A as a medical expense.

[Arthur Kamlet]

In article <XnsA0E1BB9345A42s...@130.133.4.11>,

Stuart A. Bronstein <spam...@lexregia.com> wrote:
>Alan <temp...@vacationmail.com> wrote:
>
>> My point is, you need to understand
>> that if you make that payment at the end of a tax year before you
>> receive any care, you won't be able to deduct it in that year.
>>
>
>I can certainly agree with that. But that's not what's going on in
>OP's case. In his situation he is paying a flat fee, say at the
>beginning of the year, for the privilege of seeing that particular
>doctor during the year. The payment doesn't apply to anything after
>the end of the year. (If the payment is not made at the beginning of
>the year, I agree it should be pro-rated).
>
>But it is a fee for the doctor being available during that year, and
>it expires at the end of the year. If it's prepayment for services,
>it is only for services rendered during the tax year and not in any
>subsequent year.

>From Pub 502


Payments for future medical care. Generally, you can
not include in medical expenses current payments for
medical care (including medical insurance) to be provided
substantially beyond the end of the year. This rule does not
apply in situations where the future care is purchased in
connection with obtaining lifetime care of the type de-
scribed earlier.
--

ArtKamlet at a o l dot c o m Columbus OH K2PZH

[Salmon Egg]

In article <k4ii71$el6$1...@news.mixmin.net>,

After reading some of these responses, my take is that it is a
combination of payment for services and insurance. I am on Medicare. The
physician I signed with does take Medicare payments. He gives a thorough
physical once a year. He spends more time on routine visits than was the
case with other practices.

If all goes well, much of the payment is not used up. As you get sicker,
you end up with more doctoring than the minimal amount you get in
standard Medicare, In that sense it is like insurance you would prefer
not to have to use.

--

Sam

Conservatives are against Darwinism but for natural selection.
Liberals are for Darwinism but totally against any selection.

[Barry Margolin]

In article <SalmonEgg-AF5E5...@news60.forteinc.com>,

Salmon Egg <Salm...@sbcglobal.net> wrote:

> After reading some of these responses, my take is that it is a
> combination of payment for services and insurance. I am on Medicare. The
> physician I signed with does take Medicare payments. He gives a thorough
> physical once a year. He spends more time on routine visits than was the
> case with other practices.

It's also similar to an HMO -- you pay an annual fee, and you get access
to all the HMO's services. Pub 502 says that these fees are deductible
as if they were medical insurance.

--
Barry Margolin
Arlington, MA

[Seth]

In article <k4iq5r$a6h$1...@dont-email.me>,

Alan <temp...@vacationmail.com> wrote:

>My point is that, if for any reason, you never receive any medical care
>during the year as defined in sec. 213, then the fee you paid on 1/1 for
>one year is nothing more than a personal nondeductible expense. Paying
>someone to be "available" is not medical care.

How does this differ from an HMO, which _is_ deductible? There's no
requirement that an HMO have more than one doctor.

Seth

[Alan]

On 10/4/2012 12:12 PM, Seth wrote:
> In article <k4iq5r$a6h$1...@dont-email.me>,
> Alan <temp...@vacationmail.com> wrote:
>
>> My point is that, if for any reason, you never receive any medical care
>> during the year as defined in sec. 213, then the fee you paid on 1/1 for
>> one year is nothing more than a personal nondeductible expense. Paying
>> someone to be "available" is not medical care.
>
> How does this differ from an HMO, which _is_ deductible? There's no
> requirement that an HMO have more than one doctor.
>
> Seth
>

HMO payments are deductible payments for health insurance. A concierge
fee is not a health insurance policy payment.

[Seth]

In article <k4sbe6$s3v$1...@dont-email.me>,

Alan <temp...@vacationmail.com> wrote:
>On 10/4/2012 12:12 PM, Seth wrote:
>> In article <k4iq5r$a6h$1...@dont-email.me>,
>> Alan <temp...@vacationmail.com> wrote:
>>
>>> My point is that, if for any reason, you never receive any medical care
>>> during the year as defined in sec. 213, then the fee you paid on 1/1 for
>>> one year is nothing more than a personal nondeductible expense. Paying
>>> someone to be "available" is not medical care.
>>
>> How does this differ from an HMO, which _is_ deductible? There's no
>> requirement that an HMO have more than one doctor.
>>

>HMO payments are deductible payments for health insurance. A concierge
>fee is not a health insurance policy payment.

If it also includes, say, a 25% discount on medical services (which is
meaningless, because the price is arbitrary) is it now more like an
HMO with a 75% co-pay?

Seth

[Alan]

On 10/16/12 12:40 PM, Seth wrote:
> In article <k4sbe6$s3v$1...@dont-email.me>,
> Alan <temp...@vacationmail.com> wrote:
>> On 10/4/2012 12:12 PM, Seth wrote:
>>> In article <k4iq5r$a6h$1...@dont-email.me>,
>>> Alan <temp...@vacationmail.com> wrote:
>>>
>>>> My point is that, if for any reason, you never receive any medical care
>>>> during the year as defined in sec. 213, then the fee you paid on 1/1 for
>>>> one year is nothing more than a personal nondeductible expense. Paying
>>>> someone to be "available" is not medical care.
>>>
>>> How does this differ from an HMO, which _is_ deductible? There's no
>>> requirement that an HMO have more than one doctor.
>>>
>> HMO payments are deductible payments for health insurance. A concierge
>> fee is not a health insurance policy payment.
>
> If it also includes, say, a 25% discount on medical services (which is
> meaningless, because the price is arbitrary) is it now more like an
> HMO with a 75% co-pay?
>
> Seth
>

No. It's not an insurance premium.

--
Alan
http://taxtopics.net

[removeps-groups]

"Alan" <temp...@vacationmail.com> wrote in message
news:k4sbe6$s3v$1...@dont-email.me...

> HMO payments are deductible payments for health insurance. A concierge fee
> is not a health insurance policy payment.

Is your statement about concierge fees based directly on a statute or court
case?

[Alan]

On 10/17/12 8:16 AM, removeps-groups wrote:
> "Alan" <temp...@vacationmail.com> wrote in message
> news:k4sbe6$s3v$1...@dont-email.me...
>
>> HMO payments are deductible payments for health insurance. A concierge fee
>> is not a health insurance policy payment.
>
> Is your statement about concierge fees based directly on a statute or court
> case?
>

I dare you to find one of these medical entities offering concierge
services registered with any state department of insurance as an insurer
with the policy that they are selling you listed as an offering and the
necessary tax forms filed each year reflecting the premiums and tax due
where applicable.

Guys...guys... it is not insurance. It is a fee for access that may or
not contain other items. My only point has been...
It is a nondeductible prepayment of medical expense. Until you actually
receive deductible medical care from the business entity, you don't get
a deduction. Therefore, I also made the point that if you pay the fee at
the end of the year for the following year's access, you wouldn't be
able to deduct it until you received medical care in the period covered
by the prepayment.
I'm done on this thread.

--
Alan
http://taxtopics.net

[Seth]

In article <k5n32u$lt$1...@dont-email.me>,

Alan <temp...@vacationmail.com> wrote:

>I dare you to find one of these medical entities offering concierge
>services registered with any state department of insurance as an insurer
>with the policy that they are selling you listed as an offering and the
>necessary tax forms filed each year reflecting the premiums and tax due
>where applicable.

An HMO is not insurance.

Suppose the deal is "You pay $2000/year for one complete checkup and
access to the doctor." Is it then medical care? The two items
purchased are not separable.

Seth

[Barry Margolin]

In article <k79kbm$2ql$1...@reader1.panix.com>, se...@panix.com (Seth)
wrote:

> In article <k5n32u$lt$1...@dont-email.me>,
> Alan <temp...@vacationmail.com> wrote:
>
> >I dare you to find one of these medical entities offering concierge
> >services registered with any state department of insurance as an insurer
> >with the policy that they are selling you listed as an offering and the
> >necessary tax forms filed each year reflecting the premiums and tax due
> >where applicable.
>
> An HMO is not insurance.

It's treated as if it were insurance for the purposes of taking the tax
deduction. It also satisfies the insurance requirement of Massachusetts'
health care law, and I presume also Obamacare. So while it may not
literally be insurance, as far as most laws are concerned it is.

Which then raises the question: how is a concierge practice different
from an HMO, so that the former should not get the same legal benefits?

--
Barry Margolin
Arlington, MA

[Dick Adams]

Having had 27 surgeries over the last nine and a half years,
I have seen more than my share of doctors and there are a
few to whom I would gladly pay a concierge fee to know I
would get an appointment immediately in the case of what I
think is an emergency or within five days otherwise.

After my first visit of the year, I would pay the concierge
fee and send it to my wife's health care reimbursement account.
(All of us kept men keep all of our women working so we can
use their employee benefits. More women means more benefits!)

Now if you aren't being kept by someone with terrific benefits
and must use Schedule A Medical Expenses, our colleague Alan
is on the money - Don't deduct a 2013 expense in 2012.

Dick
---
Richard D. Adams, CPA
Founding Member: Anti-Manual Labor Society

[Bill Brown]

Alan, done on the thread or not, you are mistaken. The concierge fee
is deductible, not because it is "like insurance" but because it is a
payment for medical services.