I 
108TH CONGRESS 
1ST SESSION 
H. R. 198
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 7, 2003
Mr. STEARNS (for himself, Mr. TERRY, and Mr. PAUL) 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.
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 Tax De-
duction Act of 2003’’. 
SEC. 2. DEDUCTION FOR HEALTH INSURANCE AND PRE-
SCRIPTION DRUG COSTS OF INDIVIDUALS. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended
by redesignating section 223 as section 224 and by insert-
ing after section 222 the following new section: 
‘‘SEC. 223. HEALTH INSURANCE AND PRESCRIPTION DRUG 
COSTS. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed as a deduction an amount equal to 
the sum of the amount paid during the taxable year for—
‘‘(1) insurance which constitutes medical care 
for the taxpayer and the taxpayer’s spouse and de-
pendents, plus 
‘‘(2) unreimbursed prescription drug expenses 
paid by the taxpayer for the taxpayer and the tax-
payer’s spouse and dependents. 
‘‘(b) LIMITATIONS AND SPECIAL RULES.—
‘‘(1) EMPLOYER
CONTRIBUTIONS
TO
CAFE-
TERIA PLANS, FLEXIBLE SPENDING ARRANGEMENTS, 
AND MEDICAL SAVINGS ACCOUNTS.—Employer con-
tributions to a cafeteria plan, a flexible spending or 
similar arrangement, or a medical savings account 
which are excluded from gross income under section 
106 shall be treated for purposes of subsection (a) 
as paid by the employer. 
‘‘(2) DEDUCTION
NOT
AVAILABLE
FOR
PAY-
MENT OF ANCILLARY COVERAGE PREMIUMS.—Any
amount paid as a premium for insurance which pro-
vides for—
‘‘(A) coverage for accidents, disability, den-
tal care, vision care, or a specified illness, or 
‘‘(B) making payments of a fixed amount 
per day (or other period) by reason of being 
hospitalized, 
shall not be taken into account under subsection (a). 
‘‘(3) COORDINATION
WITH
DEDUCTION
FOR 
HEALTH INSURANCE OF SELF-EMPLOYED INDIVID-
UALS.—The amount taken into account by the tax-
payer in computing the deduction under section 
162(l) shall not be taken into account under this 
section. 
‘‘(4) COORDINATION WITH MEDICAL EXPENSE 
DEDUCTION.—The amount taken into account by 
the taxpayer in computing the deduction under this 
section shall not be taken into account under section 
213. 
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) MEDICAL CARE.—
‘‘(A) IN
GENERAL.—The term ‘medical 
care’ has the meaning given such term by sec-
tion 213(d) without regard to—
‘‘(i) paragraph (1)(C) thereof, and
‘‘(ii) so much of paragraph (1)(D) 
thereof as relates to qualified long-term 
care insurance contracts. 
‘‘(B) EXCLUSION OF CERTAIN OTHER CON-
TRACTS.—The term ‘medical care’ shall not in-
clude insurance if a substantial portion of its 
benefits are excepted benefits (as defined in sec-
tion 9832(c)). 
‘‘(2) UNREIMBURSED PRESCRIPTION DRUG EX-
PENSES.—The term ‘unreimbursed prescription drug 
expenses’ means amounts paid or incurred for a pre-
scribed drug (as defined by section 213(d)(3)) the 
cost of which to the taxpayer is not reimbursed by 
insurance or otherwise. 
‘‘(d) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be appropriate to carry out this 
section.’’. 
(b) DEDUCTION ALLOWED WHETHER OR NOT TAX-
PAYER ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 
of section 62 of such Code is amended by inserting after 
paragraph (18) the following new item: 
‘‘(19) HEALTH INSURANCE AND PRESCRIPTION 
DRUG
COSTS.—The deduction allowed by section 
223.’’.
(c) CLERICAL AMENDMENTS.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code 
is amended by striking the last item and inserting the fol-
lowing new items:
‘‘Sec. 223. Health insurance and prescription drug costs. 
‘‘Sec. 224. Cross reference.’’.
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003.
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