New Biden IRS guidance undercuts the administration’s own goals for a fitter America — and reduces health-care choice to boot.
New Biden IRS guidance undercuts the administration’s own goals for a fitter America — and reduces health-care choice to boot.
W hen the Biden administration launched its Food Is Medicine campaign in 2023, it probably never imagined its own tax collectors would try to stand in the way.
But that’s what’s happening. In a little-noticed guidance document issued on the eve of Tax Day, the Internal Revenue Service wrote: “Beware of companies misrepresenting nutrition, wellness and general health expenses as medical care.”
Personal expenses for doctor-prescribed diet and exercise regimens “are not deductible or reimbursable under health flexible spending arrangements [and] health savings accounts,” according to the March 11 memo. FSAs and HSAs empower people to use pretax dollars for their health-care expenses. With a letter of medical necessity, Americans can use these accounts to purchase special diets, weight-loss programs, and other healthy living products.
The IRS’s newly “clarified” position that diet and exercise are not “medicine” for tax purposes reflects a dubious and counterintuitive interpretation of federal law.
Nothing in the tax code limits the definition of “medical care” to just medication and surgeries. Just the opposite. It defines the term broadly, as any expense for “the diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body” (emphasis added).
We should be skeptical when the IRS claims that a letter of medical necessity that a patient receives from a doctor to purchase health-related items, such as a nutritious meal plan, is not valid for tax purposes.
In fact, the United States Tax Court has ruled that special diets prescribed by a doctor do qualify as medical expenses for people with medical conditions, such as pre-diabetes, which has become endemic, affecting close to one in three Americans.
The law seems clear. Preventive health items prescribed by a physician are qualified medical expenses.
Sadly, as many as 100 million Americans face barriers to seeing a primary-care doctor. To bridge the gap, entrepreneurs have stepped up, offering to help patients get the doctor’s note they need from a licensed medical professional, so those patients can obtain the same kind of tax break for staying healthy that the IRS now claims is available only for treating sickness.
The National Institutes of Health (NIH) reports that “an unhealthy diet is one of the leading risk factors for cardiometabolic diseases, such as heart disease, stroke, and diabetes,” and “eating a healthy diet can lower your risk for some of these conditions.” And research shows that unhealthy diets account for almost 20 percent of U.S. health-care costs from heart disease, stroke, and diabetes.
A prescription for healthy food could not only improve patients’ health but also save more than $100 billion in health-care costs, according to a study published in the Public Library of Science.
The Biden administration itself says that “access to nutritious food is critical to health and resilience,” and “access to high-quality nourishment is essential for well-being.” So why would Biden’s IRS discourage people from obtaining it via an HSA? Most likely because the more people who do that, the less revenue the federal government gets.
Most of the $4.5 trillion a year spent on health care today goes to “sick care” — treating illness and disease after people get sick. Americans who receive public assistance can use their SNAP (food stamp) benefits to purchase junk food that leads to obesity and other chronic conditions. Shouldn’t government make it easier for people who want to avoid sickness in the first place?
The IRS’s effort is hazardous to Americans’ health — and wallets. HSAs help reduce medical inflation and give patients more choice and control. Families can use their HSA funds to cover health-care expenses between jobs and, crucially, to buy things their health insurance does not cover.
Studies suggest that HSAs increase access to care and help reduce overall health-care spending without causing patients to forgo preventive care. Having an HSA provides peace of mind.
Alas, today only about 10 percent of Americans have access to an HSA, thanks to burdensome federal rules. Congress should remove those barriers and give Americans more affordable and personalized options in health care.
And the IRS should rescind its erroneous “food is not medicine” guidance, so Americans can use their tax-advantaged health savings to avoid sickness.