Myra (59) from Hilversum has been ill for twenty years. She became one at the age of 39, when she had a job as a recruitment manager at an American company. First she developed the multisystem disease ME, later Lyme disease and long Covid were added. She is now incapacitated for work, has very little energy and experiences problems with everyday activities for others, such as standing, walking and having a longer conversation. She is confined to home. And it doesn’t get any better. And it doesn’t get any better: “I notice that I am going backwards.”
Her healthcare costs are high. For example, Myra follows a special diet on the advice of doctors and dieticians, she goes to the physiotherapist, she incurs high travel costs for visits to the hospital, she uses a lot of medicines and medical aids and she has to change her bedding more often, which wears out more quickly due to being in bed a lot. Some of these costs are reimbursed, for example through basic insurance, but many are not. Myra would have to pay around 800 to 1,000 euros per month if she were to do everything necessary for her illnesses. But she doesn’t have that money; she has about 200 euros available every month. That is still a high amount, she says, but she gets back about 40 percent of those expenses every year through the ‘deduction of specific healthcare costs’, a tax deduction. “I couldn’t live without it anymore.”
Cabinet wants to abolish deduction of healthcare costs
But that is now in danger of coming to an end. The Jetten cabinet wants to get rid of this arrangement, it says the coalition agreement. The deductible item will be abolished from 2028, at the same time as the associated ‘reimbursement for specific healthcare costs’. The second scheme is intended to compensate people whose income decreases due to the deduction of their healthcare costs, and who are therefore no longer eligible for (full) tax credits.
The proposed abolition does not come out of nowhere. The scheme has been criticized for years. “This tax arrangement is fraught with fundamental problems,” officials wrote of the Ministries of Health, Welfare and Sport, SZW and Finance in an evaluation last year. Three years earlier, research agency Dialogic named the scheme already ‘limitedly effective’ in a report.
The list of disadvantages mentioned by both reports is long. There is sometimes uncertainty about what can and cannot be deducted. The scheme is being used incorrectly, consciously or unconsciously. The scheme is susceptible to fraud: for example, the same stair lift can be deducted by three different people, but there is no tax inspector who can check this.
People also have to advance costs before they get part of it back later, not everyone has the money for that. Sometimes people do not dare to deduct healthcare costs because they are afraid of making mistakes.
And the arrangement is time-intensive: patients have to keep track of all costs themselves and keep receipts.
The deduction is also complicated for the tax authorities. Checking has to be done manually, which takes a lot of time. No human medical data is available. It is sometimes unclear whether something has already been reimbursed or not. And it is difficult subject matter: “No tax inspector is a specialist in healthcare,” says Edwin Heithuis, professor of fiscal economics at the University of Amsterdam. “The healthcare costs deduction runs through the Tax Authorities and therefore the Ministry of Finance. They have less understanding of healthcare there. If you, as an inspector, cancel the deduction, you are quickly accused of being inhumane.”
Deduction is a very complex arrangement
Researcher Jasper Veldman, who co-wrote the Dialogic report, calls the arrangement “very complex”. He says: “Sometimes even tax advisors don’t know exactly what can be deducted. It took a lot of effort for my colleagues and myself to write it in an understandable way in the report.”
“It makes you feel completely old,” says Professor Heithuis. “Everything is at an enormous level of detail. The thresholds are also sky-high. I always say: ‘To qualify for the deduction, you have to have so many healthcare costs that you already have one foot in the grave.’ I was actually happy about it when I read that it would be abolished.”
The deduction of specific healthcare costs was already on the verge of being scrapped in 2014, but this was canceled at the last minute. It was decided that the scheme would be revised, but that never happened. There used to be eight personal deductibles, says Heithuis, but there are now only four left – including those for specific healthcare costs.
Nearly a million people use the scheme
Despite all the disadvantages, the scheme is still widely used. In 2023 this amounted to 900,000 people. Seven out of ten patients receive less than 250 euros back, the officials report showed, but there are also chronically ill and disabled people who receive many thousands of euros per year back.
Such as Mariëlle van Dijk-Janssen, former team leader in healthcare, who has chronic (pain) complaints after a car accident. She posted on Bluesky a message in which she wrote: ‘This is the only way I can claim thousands of euros a year in healthcare costs. I’m going bankrupt.’
In an explanation, she says she receives 15,000 euros back from the tax authorities annually, much of which covers healthcare costs. She uses this to pay for therapies, treatments and medicines, which gives her more energy: “I can walk for a few hours, work in the garden, and do volunteer work.” Thanks to the deduction, this is now all possible, she says. “But not anymore. This applies to more people. I know people who are already having sleepless nights because of it. They have a low income and cannot simply generate extra income.” You get to a point, says Van Dijk-Janssen, “where you can no longer afford it and you have to compromise on your health.”
At Elke(In), the umbrella organization of 220 interest groups for people with disabilities and the chronically ill, the supporters are very concerned, says a spokesperson. “We understand that something has to be done with this complicated arrangement, but simply scrapping it is unreasonable.” She points out that other announced healthcare cuts affect the same group, such as the higher deductible and having to pay for domestic help again. “It will be an accumulation of healthcare costs. And then there are also the cuts in social security. It all ends up with the same group.”
Compensation lower than the cut
To do something about this financial decline, the government wants to allocate 350 million annually, which should be distributed through municipalities. But those municipalities themselves noted last year that this is not feasible, research showed of the Association of Dutch Municipalities. Municipalities have insufficient capacity to implement the scheme, they are faced with high costs and there is a threat of arbitrariness: each municipality will define the target group in its own way.
It is striking that the proposed compensation for municipalities of 350 million is much lower than the budgeted government cut of 618 million. This is because, a VWS spokesperson said, the ministry expects that more will be spent on the deduction in the coming years than now. But it is also because the disappearance of the deduction will result in a higher aggregate income for chronically ill and disabled people, meaning that they will soon receive lower or no allowances (such as rent and healthcare allowance). That saves the government money. “The cabinet will include that effect as a benefit from this measure,” says the spokesperson.
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Both Elke(In) and Professor Heithuis argue for a national – but simpler – scheme, better focused on the target group, although it is unclear exactly what this should look like. The umbrella organization wants to discuss this with the ministries involved in the coming months.
Jimmy Dijk (SP faction leader) said last week during a parliamentary debate that the cabinet proposal “will get people into deep trouble”. But the proposal has little chance politically, Heithuis thinks. “No politician will want to burn his hands over this. A cold, bald abolition is politically sensitive, it is seen as harsh. Giving sympathetic, sick people a contribution towards their healthcare costs, who can be against that?”
For privacy reasons, Myra does not want her surname in this article. Her full name is known to the editors.
