I 

108TH CONGRESS 

1ST SESSION H. R. 53

To improve health care choice by providing for the tax deductibility of medical 

expenses by individuals. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 7, 2003

Mr. COX introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL

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: 

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

9 insurance provided as an employee fringe benefit, 

10 but no similar tax benefit for health insurance pur-
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1 chased by individuals. Similarly, current law confers 

2 a tax benefit on third-party payment of medical ex3 penses, but no similar tax benefit for an individual’s 

4 direct payment of medical expenses. This has effec5 tively promoted employer-provided third party pay6 ment systems and effectively discouraged direct doc7 tor-patient relationships. 

8 (2) The current tax treatment of medical ex9 penses has significantly curtailed competition for 

10 both health insurance and health care services gen11 erally. This has effectively increased the cost of 

12 health care and health insurance, which in turn has 

13 exposed people to greater health risks and made it 

14 more likely that individuals will go without needed 

15 care. 

16 (3) The current tax treatment of medical ex17 penses has restricted the freedom of individuals to 

18 exercise direct control over their health care dollars. 

19 The exclusion from gross income for employer-pro20 vided health care plans with no corresponding tax 

21 benefit for health insurance and health care obtained 

22 by individuals constitutes a strong preferment for 

23 health care provided through employers’ group plans 

24 as compared to health care that individuals purchase 

25 for themselves. 
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1 (4) Providing a tax benefit for employer-pro2 vided plans, but not for individually-purchased 

3 health care, discriminates against individuals who 

4 work for companies that do not provide health bene5 fits, individuals who are self-employed, individuals 

6 who are temporarily employed, and the disabled. 

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

8 offer their employees a variety of health insurance 

9 plans. The Tax Code’s provision of benefits for only 

10 for employer-provided health insurance has discrimi11 nated against individuals who work for these em12 ployers. 

13 (6) The Tax Code’s preferment of employer14 provided group plans has triggered a marketplace 

15 response reflected in the significant increases in 

16 large group health care delivery, and the creation of 

17 a few health care conglomerates in lieu of thousands 

18 of competitive providers of medical services. This has 

19 increasingly placed medical decisions in the hands of 

20 health care bureaucracies, and significantly eroded 

21 the doctor-patient relationship. Medical decisions 

22 should be returned to doctors and their patients. 

23 This will result in higher quality treatment and more 

24 patient protection. 
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1 (7) Consumers should have the freedom to pur2 chase the health insurance of their choice, to choose 

3 their own doctors, and to make their own decisions 

4 about their health care. 

5 (8) By putting the medical choices made by in6 dividuals on an equal footing with the medical 

7 choices made for them by their employers and third 

8 parties, the Tax Code can encourage greater choice 

9 and competition, thereby reducing the cost of nec10 essary insurance for all Americans. This will enable 

11 millions more Americans to obtain needed health 

12 coverage, to make their own choices about which 

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

14 they deserve and expect. 

15 SEC. 3. TAX DEDUCTIBILITY OF MEDICAL EXPENSES FOR 

16 INDIVIDUALS. 

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

18 Revenue Code of 1986 (relating to the treatment of med19 ical and dental expenses) is amended to read as follows: 

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

21 allowed as a deduction the expenses paid during the tax22 able year, not compensated for by insurance or otherwise, 

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

24 or a dependent (as defined in section 152).’’. 
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1 (b) EFFECTIVE DATE.—The amendment made by 

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

3 the calendar year which includes the date of the enactment 

4 of this Act.

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