How would Sensible Tax Reform affect medical costs?
The issue of medical expenses is one of the most difficult to resolve with regard to a federal consumption tax. It would be unconscionable to tax emergency and extended care, for example. The FCT will not be applied to emergency care or medically-determined extended care or prescriptions. It also will not be applied to normal levels of preventive care. For example, annual physicals with their normal tests (such as blood texts and mammograms) will be exempt from the FCT. However, clearly not all medical costs are extraordinary. Elective medical costs, such as over-the-counter medications and elective cosmetic plastic surgery or dental braces, will be taxable. In addition, the tax-free cost will be limited by normal insurance-industry standards, such as double rooms in hospitals. Extraordinary elective services, such as a private room, luxury facilities, luxury meals, accommodations for family, or a full-time attendant, will be taxable.
