As health care costs continue to strain household budgets across the United States, Sen. Josh Hawley (R-Mo.) has introduced a sweeping new tax proposal aimed at easing the burden of medical expenses. Branded as the “No Taxes on Healthcare Act,” the plan would allow American households to deduct up to $25,000 per person in out-of-pocket medical spending from their taxable income. That figure includes not only direct medical expenses but also health insurance premiums that individuals pay themselves.
What makes Hawley’s proposal particularly notable is that this deduction would apply in addition to the standard deduction, which the vast majority of taxpayers already claim. Under current law, taxpayers typically must choose between taking the standard deduction or itemizing their deductions. Medical expenses are deductible today only for those who itemize—and only to the extent that those expenses exceed 7.5% of adjusted gross income (AGI). That structure limits the benefit to a relatively small subset of higher-expense households.
Hawley’s plan would upend that approach by making medical deductions “above the line.” This means taxpayers could claim the deduction regardless of whether they itemize or take the standard deduction. If enacted, it would represent one of the most dramatic expansions of health-related tax relief in decades.
But while the proposal has generated enthusiasm among some conservatives and middle-class advocacy groups, it also raises major fiscal, political, and equity questions—especially as Congress battles over the future of Affordable Care Act (ACA) subsidies set to expire at the end of 2025.
