Making Health Promotion Tax Deductible:
Congressman Weller’s Personal Health Investment Today (PHIT) Act

download a free pdf version of this article

On May 25, 2006, Congressman Jerry Weller of Joliet Illinois introduced H.R. 5479, the Personal Health Investment Today (PHIT) Act of 2006. The full text of the legislation is below and more details can be found at: http://thomas.loc.gov/cgi-bin/bdquery/z?d109:h.r.05479:

“Personal Health Investment Today Act of 2006 H.R. 5479

A BILL To amend the Internal Revenue Code of 1986 to treat certain amounts paid for exercise equipment and physical fitness programs as amounts paid for medical care. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘Personal Health Investment Today Act of 2006’.
SECTION. 2. CERTAIN EXERCISE EQUIPMENT AND PHYSICAL FITNESS PROGRAMS TREATED AS MEDICAL CARE.
(a) In General—Subsection (d) of section 213 of the Internal Revenue Code of 1986 (relating to medical, dental, etc., expenses) is amended by adding at the end the following new paragraph:
‘(12) EXERCISE EQUIPMENT AND PHYSICAL FITNESS PROGRAMS—
‘(A) IN GENERAL—The term `medical care' shall include amounts paid—
‘(i) to purchase or use equipment used in a program (including a self-directed program) of physical exercise, and
‘(ii) to participate, or receive instruction, in a program of physical exercise.

‘(B) LIMITATION—Amounts treated as medical care under subparagraph (A) shall not exceed $1,000 with respect to any individual for any taxable year.’
(b) Effective Date—The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.”

The bill was inconsequential from the perspective that it received little media attention, was not reviewed in committee, not voted on by the House of Representatives, and it evaporated when the 109th Congress ended in 2006.

It was revolutionary from the perspective that it is the first serious effort by a member of the U. S. Congress to put health promotion spending on the same level as medical spending from a tax perspective. If this bill passes, it would make fitness programs more affordable for all Americans, and hopefully inspire more people to exercise. It would also provide an economic boon to the fitness industry.

The bill has some important limitations. First, it needs to be amended to allow deduction of health promotion expenses through all tax vehicles, not just MSAs, HSAs, and FSAs. This will make the bill better serve society, especially for low income people and older adults, most of whom do not have access to MSAs, HSAs, and FSAs. From a political perspective this would increase the likelihood of support from Democrats in general and from groups that represent seniors, like the huge and powerful AARP.

Second, services covered need to be expanded to include more health promotion services. At a minimum, smoking cessation and weight control should be included. This would strengthen the scientific rationale and expand the political support base. There is an abundance of evidence supporting the health risks of inactivity, but there is limited evidence documenting its financial cost. In contrast, volumes of studies have been published on the impact of tobacco use on medical costs and productivity. Furthermore, smoking cessation has been found to be one of the most cost effective health treatments in health care. Compelling evidence on the medical and absenteeism costs of obesity has emerged in the past few years. Furthermore, the visible nature of the obesity epidemic has made it important among many members of Congress. Finally, including weight control would attract support from the $50 billion weight control industry.

Critics can make a compelling argument that this bill will reduce federal tax receipts and increase the federal deficit. My initial estimate of the cost of this bill is $5.2 billion/year. These concerns can be countered with the equally compelling argument that the bill will stimulate economic growth, which will in turn produce personal and corporate income tax payments in excess of the initial tax cost of the bill.

Critics will also make well-documented arguments that effectiveness of many health promotion interventions, especially those in weight control and stress management, has not been proven. These concerns can be countered with equally persuasive arguments that the effectiveness of many common medical procedures has not been proven.

Watching the debate around this bill will be fascinating. It is yet another milestone marking the emergence of health promotion into the main stream of health care.

Michael P. O'Donnell, PhD, MBA, MPH
Editor in Chief, American Journal of Health Promotion