IRS Section 213 – Non Deductible Medical Expenses

Section 213 of the IRS covers FSA’s and HRA’s. FSA stands for Flexible Spending Account and HRA stands for Health Reimbursement Account. The IRS, and rightly so, has outlined approved or deductible medical expenses and also created a list of non-deductible expenses.

As you can probably expect, deductible expenses include physician care, x-rays, lab tests, healing services, etc. Healing services stood out to me because it best represents how our country feels about healthcare. While in and of itself, healing services are good for those who need them, our country reacts to health issues. Instead of healthcare we need to call our system “sick-care.”  We spend billions of dollars to help sick people function. We spend little to keep healthy people from getting sick and little on incentives for all of us to engage in proven techniques that promote health. We don’t reward health. We treat sick.

Since we’re not fond of finger pointing and playing the blame game, this is not about the IRS. Our government is a democracy. They serve and govern based on our collective decisions. If we don’t tell them, they make the choices for us. It’s not their fault. We need to collectively affect change with our votes. Until we do so, our healthcare costs will continue to rise.

The above graphic is something we all need to be concerned about. It’s a screenshot of the non-deductible expenses often associated with “healthcare.” Several alarming expenses are not covered. We should cover (as a deductible expense) gym memberships. We should definitely cover stop smoking programs and weight loss programs. Most experts agree we need to focus on preventable solutions. Unfortunately, our tax code does not. Statistics say 75 cents of every healthcare dollar are spent treating preventable chronic diseases like heart disease and diabetes. Why not be willing to at least make effective preventative healthcare options deductible?

Here’s a radical idea: Why not, starting on a certain date, make all diabetes and heart disease medical expenses non-deductible for anyone who does not have either of these as of the start date? Create a public service campaign letting everyone know and replace any covered diabetes and heart disease deductions, prior to the start date, with a new set of deductible/covered expenses for proven ways that prevent these diseases?