I 

111TH CONGRESS 

1ST SESSION H. R. 502 

To amend the Internal Revenue Code of 1986 to improve health care choice 

by providing for the tax deductibility of medical expenses by individuals. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 14, 2009 

Mrs. BACHMANN (for herself, Mr. BROWN of South Carolina, Mr. BROUN of 

Georgia, Mr. WESTMORELAND, Mr. MCCLINTOCK, Mr. HENSARLING, Mr. 

FLEMING, Mr. THOMPSON of Pennsylvania, Mrs. LUMMIS, Mr. PAUL, Mr. 

BURTON of Indiana, Mr. GRAVES, Mr. SESSIONS, Mrs. BLACKBURN, Mr. 

BARTLETT, Mr. ROHRABACHER, and Mr. SCALISE) introduced the following bill; which was referred to the Committee on Committee on Ways 

and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to improve 

health care choice by providing for the tax deductibility 

of medical expenses by 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 Freedom 

5 of Choice Act’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 


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1 (1) Current law confers a tax benefit for health 

2 insurance provided as an employee fringe benefit, 

3 but no similar tax benefit for health insurance pur4 chased by individuals. Similarly, current law confers 

5 a tax benefit on third-party payment of medical ex6 penses, but no similar tax benefit for most individ7 uals’ direct payment of medical expenses. This has 

8 effectively promoted employer-provided third party 

9 payment systems and effectively discouraged direct 

10 doctor-patient relationships. 

11 (2) The current tax treatment of medical ex12 penses has significantly curtailed competition for 

13 both health insurance and health care services gen14 erally. This has effectively increased the cost of 

15 health care and health insurance, which in turn has 

16 exposed people to greater health risks and made it 

17 more likely that individuals will go without needed 

18 care. 

19 (3) The current tax treatment of medical ex20 penses has restricted the freedom of individuals to 

21 exercise direct control over their health care dollars. 

22 The exclusion from gross income for employer-pro23 vided health care plans with no corresponding tax 

24 benefit for health insurance and health care obtained 

25 by individuals (except the self-employed) constitutes 


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1 a strong preferment for health care provided 

2 through employers’ group plans as compared to 

3 health care that individuals purchase for themselves. 

4 This is why 90 percent of Americans under age 65 

5 with private health insurance receive it through their 

6 employer. 

7 (4) Providing a tax benefit for employer-pro8 vided plans, but not for individually purchased 

9 health care, discriminates against individuals who 

10 work for companies that do not provide health bene11 fits, individuals who are temporarily employed, and 

12 the disabled. 

13 (5) In many cases, employers are not able to 

14 offer their employees a variety of health insurance 

15 plans. The Tax Code’s provision of benefits for 

16 mostly employer-provided health insurance has dis17 criminated against individuals who work for these 

18 employers, especially small businesses. This is why 

19 90 percent of American businesses that provide 

20 health insurance offer employees the ‘‘choice’’ of 

21 only one health care plan. Americans who work for 

22 businesses with fewer than 25 employees are half as 

23 likely to have health coverage as those working for 

24 companies with 1,000 or more employees. 


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1 (6) The Tax Code’s preferment of employer2 provided group plans has triggered a marketplace 

3 response reflected in the significant increases in 

4 large group health care delivery, and the creation of 

5 a few health care conglomerates in lieu of thousands 

6 of competitive providers of medical services and 

7 health insurance. This has increasingly placed med8 ical decisions in the hands of health care bureauc9 racies, and significantly eroded the doctor-patient re10 lationship. Medical decisions should be returned to 

11 doctors and their patients. This will result in higher 

12 quality treatment and more patient protection. 

13 (7) Consumers should have the freedom to pur14 chase the health insurance of their choice, to choose 

15 their own doctors, and to make their own decisions 

16 about their health care. 

17 (8) By putting the medical choices made by in18 dividuals on an equal footing with the medical 

19 choices made for them by their employers and third 

20 parties, the Tax Code can encourage greater choice 

21 and competition, thereby reducing the cost of nec22 essary insurance for all Americans. This will enable 

23 millions more Americans to obtain needed health 

24 coverage, to make their own choices about which 


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1 doctors to see, and to have access to the quality care 

2 they deserve and expect. 

3 SEC. 3. TAX DEDUCTIBILITY OF MEDICAL EXPENSES FOR 

4 INDIVIDUALS. 

5 (a) IN GENERAL.—Section 213(a) of the Internal 

6 Revenue Code of 1986 (relating to the treatment of med7 ical and dental expenses) is amended to read as follows: 

8 ‘‘(a) ALLOWANCE OF DEDUCTION.—There shall be 

9 allowed as a deduction the expenses paid during the tax10 able year, not compensated for by insurance or otherwise, 

11 for medical care of the taxpayer, the taxpayer’s spouse, 

12 or a dependent (as defined in section 152, determined 

13 without regard to subsections (b)(1), (b)(2), and (d)(1)(B) 

14 thereof).’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 subsection (a) shall apply to taxable years beginning after 

17 the calendar year which includes the date of the enactment 

18 of this Act. 

Æ 


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