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Replacing ObamaCare: Full Deductibility

It appears increasingly likely that the Supreme Court will strike down part or all of the controversial ObamaCare law this June. The left has responded with skepticism, warnings, and emotional appeals to save the unconstitutional individual mandate. They are unified in threatening that the American health care system will remain broken if ObamaCare is struck down. Ad nauseam, they insist that conservatives haven’t offered any solutions.

This simply isn’t true. Conservatives have always made it clear that ObamaCare needs to be replaced as well as repealed. Representative Paul Broun (R-GA) recently introduced a great “repeal and replace” bill, the Patient OPTION Act. This bill is a comprehensive health care reform package designed to create a true patient-centered system that addresses the skyrocketing cost and lack of consumer control in health care.

One key provision allows you to deduct all of your health care expenses, including health insurance, from your tax returns. As things stand today, only health care expenses exceeding 7.5% of your adjusted gross income may be deducted from your taxes owed. Many Americans don’t pass that threshold and receive no tax relief from the current system as a result. For those who do have high medical expenses, recouping that chunk of their income would provide tremendous relief.

Critics often argue that the American health care system undertreats chronic conditions and fails to encourage preventative care. Treating chronic conditions and practicing preventative care can be a serious drain on a family’s resources, but usually the expenses won’t be high enough to hit that 7.5% benchmark. By making all health care expenditures fully tax deductible, more Americans will be able to treat their chronic conditions and afford preventative care.

Full tax deductibility would also level the playing field for all Americans with regard to health insurance. The current tax code discriminates against Americans who would rather forgo employer-based insurance to purchase an individual insurance plan, or self-insure. Therefore, making the tax code fairer also increases patient choice.

There is a long history behind the 7.5% deduction threshold. It starts with the Social Security Amendments (Medicare Act) of 19651, which set the benchmark at 3%. The Tax Equity and Fiscal Responsibility Act of 19822 raised that floor to 5%. A few years later, the Tax Reform Act of 19863 brought the deduction percentage to the current 7.5%. Finally, ObamaCare4 increased it to 10% for folks over age 65. Beginning in 2013, this will make health care even more costly for seniors.

Other conservative groups have suggested different forms of tax relief, such as tax credits. However, these plans are politically unfeasible and would make it even more difficult to balance the federal budget. Full deductibility is a doable proposal that would make a real difference in the lives of most Americans.

By itself, full tax deductibility will not revolutionize the American health care system. However, packaged with the comprehensive set of reforms in Rep. Broun’s Patient OPTION Act, full tax deductibility is an important step toward a patient-centered system that focuses on lowering costs and improving the quality of health care.

TAKE ACTION: Urge your Members of Congress to cosponsor the Patient OPTION Act!


 Public Law 89-97, Section 106(a) 

Public Law 97-248, Section 202(a)  subsection (a) 

Public Law 99-514, subsection (a) 

Public Law 111-148, Section 9013, title IX

Robert Paxton

Individuals do not see exactly how you can easily extend care to individuals who do not now have it without harming folks who do have it now. I think Obama ignored, as did Clinton, the sensitivity of individuals to exactly what they see as an effort to make them share the healthcare with unsatisfactory individuals. People see it appropriately. "Healthcare reform" is news speak for redistribution. Individuals do not wish to "share" their specialist-- they desire his undivided attention. They do not desire the exceptional facilities, such as <" Carolina drug rehabs, near their house to be moved far away in order to also out "health care variations." They do not desire funds utilized for treating for their youngster's unusual cancer to be moved into purchasing others birth control.