I
106TH CONGRESS
2D SESSION
H. R. 5022
To improve health care choice by providing for the tax deductibility of medical
expenses by individuals.
IN THE HOUSE OF REPRESENTATIVES
JULY 27, 2000
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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Health Care Freedom
of Choice Act’’.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Current law confers a tax benefit for health
insurance provided as an employee fringe benefit,
but no similar tax benefit for health insurance pur-
chased by individuals. Similarly, current law confers
a tax benefit on third-party payment of medical ex-
penses, but no similar tax benefit for an individual’s
direct payment of medical expenses. This has effec-
tively promoted employer-provided third party pay-
ment systems and effectively discouraged direct doc-
tor-patient relationships.
(2) The current tax treatment of medical ex-
penses has significantly curtailed competition for
both health insurance and health care services gen-
erally. This has effectively increased the cost of
health care and health insurance, which in turn has
exposed people to greater health risks and made it
more likely that individuals will go without needed
care.
(3) The current tax treatment of medical ex-
penses has restricted the freedom of individuals to
exercise direct control over their health care dollars.
The exclusion from gross income for employer-pro-
vided health care plans with no corresponding tax
benefit for health insurance and health care obtained
by individuals constitutes a strong preferment for
health care provided through employer’s group plans
as compared to health care that individuals purchase
for themselves.
(4) Providing a tax benefit for employer-pro-
vided plans, but not for individually-purchased
health care, discriminates against individuals who
work for companies that do not provide health bene-
fits, individuals who are self-employed, individuals
who are temporarily employed, and the disabled.
(5) In many cases, employers are not able to
offer their employees a variety of health insurance
plans. The Tax Code’s provision of benefits for only
for employer-provided health insurance has discrimi-
nated against individuals who work for these em-
ployers.
(6) The Tax Code’s preferment of employer-
provided group plans has triggered a marketplace
response reflected in the significant increases in
large group health care delivery, and the creation of
a few health care conglomerates in lieu of thousands
of competitive private practitioners. This has in-
creasingly placed medical decisions in the hands of
health care bureaucracies, and significantly eroded
the doctor-patient relationship. Medical decisions
should be returned to doctors and their patients.
This will result in higher quality treatment and more
patient protection.
(7) Consumers should have the freedom to pur-
chase the health insurance of their choice, to choose
their own doctors, and to make their own decisions
about their health care.
(8) By putting the medical choices made by in-
dividuals on an equal footing with the medical
choices made for them by their employers and third
parties, the Tax Code can encourage greater choice
and competition, thereby reducing the cost of nec-
essary insurance for all Americans. This will enable
millions more Americans to obtain needed health
coverage, to make their own choices about which
doctors to see, and to have access to the quality care
they deserve and expect.
SEC. 3. TAX DEDUCTIBILITY OF MEDICAL EXPENSES FOR
INDIVIDUALS.
(a) IN GENERAL.—Section 213(a) of the Internal
Revenue Code of 1986 (relating to the treatment of med-
ical and dental expenses) is amended to read as follows:
‘‘(a) ALLOWANCE OF DEDUCTION.—There shall be
allowed as a deduction the expenses paid during the tax-
able year, not compensated for by insurance or otherwise,
for medical care of the taxpayer, the taxpayer’s spouse,
or a dependent (as defined in section 152).’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
the calendar year which includes the date of the enactment
of this Act.
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