Congress gives tax break for health insurance—but mainly helps the wealthy
H.R. 111 — To amend the Internal Revenue Code of 1986 to allow an above-the-line deduction for health insurance premiums. · Filed by Andy Biggs (R-AZ) · Introduced Jan 3, 2025 · Referred to committee
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What it does
This bill allows individuals to deduct health insurance premiums directly from their taxable income as an 'above-the-line' deduction, meaning they can claim it without itemizing other deductions. Currently, most people cannot deduct premiums unless they are self-employed or meet narrow criteria; this change would let any taxpayer reduce their taxable income by the full amount they pay for health insurance for themselves, their spouse, and dependents, effective for tax years beginning in 2025.
Why we flagged it
The bill's sole operative mechanism is a direct tax deduction for health insurance premiums paid by individuals. It is a straightforward tax-code amendment with no riders or hidden provisions.
What the text implies
- The deduction is available to all taxpayers regardless of income level, meaning high-income earners receive larger absolute tax savings than lower-income earners (a regressive benefit structure).
- The deduction applies only to premiums for 'medical care' as defined in IRC §213(d), which excludes certain supplemental or limited-benefit plans; the scope depends on that definition, which is not restated here.
The full analysis lists 4 implications of this text.
Who stands to gain
Individual taxpayers with health insurance; Self-employed individuals and independent contractors; High-income earners (who receive larger absolute tax savings)