I 

109TH CONGRESS 

1ST SESSION H. R. 218

To amend the Internal Revenue Code of 1986 to allow a deduction for 

amounts paid for health insurance and prescription drug costs of individuals. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 4, 2005

Mr. STEARNS introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to allow a 

deduction for amounts paid for health insurance and 

prescription drug costs of individuals.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Health Care Tax De5 duction Act of 2005’’. 

6 SEC. 2. DEDUCTION FOR HEALTH INSURANCE AND PRE7 SCRIPTION DRUG COSTS OF INDIVIDUALS. 

8 (a) IN GENERAL.—Part VII of subchapter B of chap9 ter 1 of the Internal Revenue Code of 1986 is amended 
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1 by redesignating section 224 as section 225 and by insert2 ing after section 223 the following new section: 

3 ‘‘SEC. 224. HEALTH INSURANCE AND PRESCRIPTION DRUG 

4 COSTS. 

5 ‘‘(a) IN GENERAL.—In the case of an individual, 

6 there shall be allowed as a deduction an amount equal to 

7 the sum of the amount paid during the taxable year for—

8 ‘‘(1) insurance which constitutes medical care 

9 for the taxpayer and the taxpayer’s spouse and de10 pendents, plus 

11 ‘‘(2) unreimbursed prescription drug expenses 

12 paid by the taxpayer for the taxpayer and the tax13 payer’s spouse and dependents. 

14 ‘‘(b) LIMITATIONS AND SPECIAL RULES.—

15 ‘‘(1) EMPLOYER CONTRIBUTIONS TO CAFE16 TERIA PLANS, FLEXIBLE SPENDING ARRANGEMENTS, 

17 AND MEDICAL SAVINGS ACCOUNTS.—Employer con18 tributions to a cafeteria plan, a flexible spending or 

19 similar arrangement, a medical savings account, or 

20 a health savings account which are excluded from 

21 gross income under section 106 shall be treated for 

22 purposes of subsection (a) as paid by the employer. 

23 ‘‘(2) DEDUCTION NOT AVAILABLE FOR PAY24 MENT OF ANCILLARY COVERAGE PREMIUMS.—Any 
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1 amount paid as a premium for insurance which pro2 vides for—

3 ‘‘(A) coverage for accidents, disability, den4 tal care, vision care, or a specified illness, or 

5 ‘‘(B) making payments of a fixed amount 

6 per day (or other period) by reason of being 

7 hospitalized, 

8 shall not be taken into account under subsection (a). 

9 ‘‘(3) COORDINATION WITH DEDUCTION FOR

10 HEALTH INSURANCE OF SELF-EMPLOYED INDIVID11 UALS.—The amount taken into account by the tax12 payer in computing the deduction under section 

13 162(l) shall not be taken into account under this 

14 section. 

15 ‘‘(4) COORDINATION WITH MEDICAL EXPENSE

16 DEDUCTION.—The amount taken into account by 

17 the taxpayer in computing the deduction under this 

18 section shall not be taken into account under section 

19 213. 

20 ‘‘(c) DEFINITIONS.—For purposes of this section—

21 ‘‘(1) MEDICAL CARE.—

22 ‘‘(A) IN GENERAL.—The term ‘medical 

23 care’ has the meaning given such term by sec24 tion 213(d) without regard to—

25 ‘‘(i) paragraph (1)(C) thereof, and 
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1 ‘‘(ii) so much of paragraph (1)(D) 

2 thereof as relates to qualified long-term 

3 care insurance contracts. 

4 ‘‘(B) EXCLUSION OF CERTAIN OTHER CON5 TRACTS.—The term ‘medical care’ shall not in6 clude insurance if a substantial portion of its 

7 benefits are excepted benefits (as defined in sec8 tion 9832(c)). 

9 ‘‘(2) UNREIMBURSED PRESCRIPTION DRUG EX10 PENSES.—The term ‘unreimbursed prescription drug 

11 expenses’ means amounts paid or incurred for a pre12 scribed drug (as defined by section 213(d)(3)) the 

13 cost of which to the taxpayer is not reimbursed by 

14 insurance or otherwise. 

15 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 

16 such regulations as may be appropriate to carry out this 

17 section.’’. 

18 (b) DEDUCTION ALLOWED WHETHER OR NOT TAX19 PAYER ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 

20 of section 62 of such Code is amended by inserting after 

21 paragraph (19) the following new item: 

22 ‘‘(20) HEALTH INSURANCE AND PRESCRIPTION

23 DRUG COSTS.—The deduction allowed by section 

24 223.’’. 
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1 (c) CLERICAL AMENDMENTS.—The table of sections 

2 for part VII of subchapter B of chapter 1 of such Code 

3 is amended by striking the last item and inserting the fol4 lowing new items:

‘‘Sec. 224. Health insurance and prescription drug costs. 

‘‘Sec. 225. Cross reference.’’.

5 (d) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years beginning after 

7 December 31, 2005.

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