Ron Paul Introduces the Private Option Health Care Act (HR 5444)

Statement of Congressman Ron Paul
United States House of Representatives
Statement Introducing the Private Option Health Care Act (HR 5444)

May 27, 2010

Madam Speaker, I rise to introduce the Private Option Health Care Act. This bill places individuals back in control of health care by replacing the recently passed tax-spend-and-regulate health care law with reforms designed to restore a free market health care system.

The major problems with American health care are rooted in government policies that encourage excessive reliance on third-party payers. The excessive reliance on third-party payers removes incentives for individual patients to concern themselves with health care costs. Laws and policies promoting Health Maintenance Organizations (HMOs) resulted from a desperate attempt to control spiraling costs. However, instead of promoting an efficient health care system, HMOs further took control over health care away from patients and physicians. Furthermore, the third-party payer system creates a two-tier health care system where people whose employers can afford to offer “Cadillac” plans have access to top quality health care, while people unable to obtain health insurance from their employers face obstacles in obtaining quality health care.

The Private Option Health Care Act gives control of health care back into the hands of individuals through tax credits and tax deductions, improving Health Savings Accounts and Flexible Savings Accounts. Specifically, the bill:

A. Provides all Americans with a tax credit for 100% of health care expenses. The tax credit is fully refundable against both income and payroll taxes;
B. Allows individuals to roll over unused amounts in cafeteria plans and Flexible Savings Accounts (FSA);
C. Provides a tax credit for premiums for high-deductible insurance policies connected with a Health Savings Accounts (HSAs) and allows seniors to use funds in HSAs to pay for medigap policies;
D. Repeals the 7.5% threshold for the deduction of medical expenses, thus making all medical expenses tax deductible.

This bill also creates a competitive market in heath insurance. It achieves this goal by exercising Congress’s authority under the Commerce Clause to allow individuals to purchase health insurance across state lines. The near-monopoly position many health insurers have in many states and the high prices and inefficiencies that result, is a direct result of state laws limiting people’s ability to buy health insurance that meets their needs, instead of a health insurance plan that meets what state legislators, special interests, and health insurance lobbyists think they should have. Ending this ban will create a truly competitive marketplace in health insurance and give insurance companies more incentive to offer quality insurance at affordable prices.

The Private Option Health Care Act also provides an effective means of ensuring that people harmed during medical treatment receive fair compensation while reducing the burden of costly malpractice litigation on the health care system. The bill achieves this goal by providing a tax credit for negative outcomes insurance purchased before medical treatment. The insurance will provide compensation for any negative outcomes of the medical treatment. Patients can receive this insurance without having to go through lengthy litigation and without having to give away a large portion of their awards to trial lawyers.

Finally, the Private Option Health Care Act also lowers the prices of prescription drugs by reducing barriers to the importation of Food and Drug Administration (FDA)-approved pharmaceuticals. Under my bill, anyone wishing to import a drug simply submits an application to the FDA, which then must approve the drug unless the FDA finds the drug is either not approved for use in the United States or is adulterated or misbranded. This process will make safe and available imported medicines affordable to millions of Americans. Letting the free market work is the best means of lowering the cost of prescription drugs.

Madam Speaker, the Private Option Health Care Act allows Congress to correct the mistake it made last month by replacing the new health care law with health care measures that give control to health care to individuals, instead of the federal government and politically-influential corporations. I urge my colleagues to support this bill.

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  • Socialists don’t like Capitalism – ObamaCare 101: What the Healthcare Law Means to You Part 1 of 3 May 25, 2010 – “TheJohnBirchSociety’s Channel … takes you into the new healthcare law. He identifies a pattern of government broken promises, revealing that if something sounds too good to be true, then it probably is. Find out what’s really in the new law and what you can expect long term.” this and others at youtube-com
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    – examiner-com Sources say smackdown of Obama by Supreme Court may be inevitable! July 9 2010
    – yahoo-com Op-Ed: Republican calls for patient-centered wellness Nov 2, 2009 “… The heart of patient-centered wellness for our people-powered world is prudent, targeted, multi-track reforms that reduces costs by leveraging the communications revolution and market forces to increase the supply of health care amid rising demand. Immediate, obvious measures include reforming medical liability laws; ending exclusions for pre-existing conditions; expanding health savings accounts; providing tax credits for purchasing private health insurance; allowing association health plans; permitting health insurance purchases across state lines; encouraging individuals to insure against changes in health status; incentivizing preventative health care; and applying information technology to enhance transparency and increase efficiencies. All this can be achieved without trillions in new spending, taxes and government-dictated, radical changes to Americans’ current health care…”
    – aei-org (American Enterprise Institute for Public Policy Research) – excellent resource for researching nearly any subject, also youtube-com, and articlesbase-com
    Art Thompson, CEO of The John Birch Society,
    Takebackmedicine-com Enslavement by Health Insurance August 30, 2010 by By: Richard Amerling, MD
    “You load sixteen tons, what do you get,
    another day older and deeper in debt,
    Saint Peter don’t you call me ’cause I can’t go,
    I owe my soul to the company store”
    —-“Sixteen Tons” Merle Travis
    “According to Wikipedia, the “company store” in this classic country song refers to the “truck system” where employees are paid in substitute currency, known as “scrip.” This limits employees’ ability to choose how to spend earnings, generally to the benefit of the employer. In closed economic systems, such as existed in various mining towns, workers had little choice but to buy from the company store, which often led to significant indebtedness, limiting their ability to leave the system. This created a form of indentured servitude, prompting legislation that made payment in other than legal tender illegal.”
    – socialsecurityinstitute-com February 03, 2011 ENOUGH IS ENOUGH “…The Welfare State Establishment will squeal and whine and bluster about how such “draconian spending cuts” will mean an end to the welfare state as we know it. Oh, but were that only true. What spending cuts of this magnitude would really mean is Congress has taken just the first step toward restoring fiscal sanity. But, we’ve got to begin somewhere. If not now, when; if not here, where?”
    – * blogs Are Republicans Going All Wobbly On Spending? Feb. 14 2011 “We are less than 60 days into the new Congress, and already the newly reinvigorated Republican Party appears to be going all wobbly over spending. [*]This clever video illustrates the problem far better than any wonkish prose can convey…The Congressional Budget Office says the federal budget deficit will rise to $1.5 trillion, or almost 10% of GDP, this year — the highest since World War II and ten times the Administration’s estimate for this year when President Obama came into office. Beyond 2011, CBO projects the deficit plummeting to $703 billion in 2013, falling in percentage terms to just over four percent of GDP in 2014 and to less than 3 percent of GDP in 2018 ($610 billion). That’s whistling past the graveyard, and it only encourages Congress to remain in denial about the need to cut federal spending drastically…”
    – – Big legal setback for Obama’s health care overhaul Dec 13,
    “ …Obama aides said implementation would not be affected, noting that the individual insurance requirement and other major portions of the legislation don’t take effect until 2014.
    Underscoring the potential for Hudson’s ruling to become a political cudgel for the new Republican House majority, incoming House Speaker John Boehner, R-Ohio, quickly cautioned states against “investing time and resources in Obamacare’s implementation now that its central mandate has been ruled unconstitutional.”

  • Socialists don’t like Capitalism

    After doing some research, the following questions may be worth finding answers to – Here are a couple to ask your Reps during their town-hall meetings:
    “Can you honestly answer exactly WHO wrote the House Health care Bill; all 1,000+pages of it…within 6 months of Obama taking office? Who specifically are the “community organizations” mentioned on pages 469-472?”
    “Did Waxman/Hartley actually write the Cap and Trade bill; or did the Blue-Green Alliance Or the Alliance for Climate Protection?”
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    -mountainwestmilitia-com America transformed (Cloward-Piven Strategy)
    – demint.senate-gov The American Option: A Jobs Plan That Works January 29, 2009
    – *Congressman Paul Ryan – Creating Jobs and Generating Economic Growth – “Roadmap for America’s Future”
    -Many Senators will accept e-mail outside of their constituents’ area.
    -*At Thomas-gov website click on House of Representatives/Congress to get e-mail, phone, address of reps for zip code entered.
    – humanevents-com/UncommonKnowledge – Four part video – interesting comparison of US to Europe
    AMERICA IS BLESSED – They don’t know how lucky they are – nearly no alternative/conservative media in Europe – TEA people will not be found in Europe – covers stimulus, health”care”, unions, etc. – also much information about healthscare tax/fine

  • Yeah, it’s good, very useful, thanks 🙂

  • Claim:
    “Provides all Americans with a tax credit for 100% of health care expenses. The tax credit is fully refundable against both income and payroll taxes”

    “All health care is gonna be free! The federal gov’t will pick up 100% of the tab!”

    That’s very similar to the Canadian system, except without the paperwork reduction. No wonder Ron Paul is buddies with left-wing nutters like Ralph Nader & Cynthia McKinney, even to the point of advising his supporters to vote for Baldwin, Nader or McKinney rather than McCain/Palin in 2008.

    Ron Paul is one of the big reasons we’re in this mess. And if you want a preview of just how big a mess it’s going to be in 30-40 years, just take a peek at Canada’s mess. (It is now ~42 years after their gov’t took over health care.) If you think Canadian health care is not a mess, here’s a Canadian web site which will clear up your confusion:


    • kramer

      Hey Dave, have you had a chance to read the full text of the bill? The credit is limited:

      (b) Limitation- The credit allowed by subsection (a) for the taxable year shall not exceed the sum of–
      ‘(1) the taxpayer’s net income tax for the taxable year, plus
      ‘(2) the taxpayer’s Social Security taxes (as defined in section 24(d)) for such taxable year.

      So doesn’t that make a difference for what you are talking about?

    • B.D.Harper

      After reading the bill I can assure you it’s nothing similar to Canada’s system.
      This bill makes it so that instead of giving money to the federal government through your income taxes, your income taxes (as well as social security payouts) can be used directly to pay off your medical expenses, be they for procedures or insurance you wish to purchase.

      Furthermore, neoconservatives and libertarians have almost nothing in common. I don’t understand why or where from you’re drawing such parallels.

    • mildearth

      It doesn’t mean it’s free, it means you get a tax deduction write-off when tax time comes and you don’t have to give them as much of your own earned money because you are making sure to take care of yourself.

      Paul’s idea is more of paying into a health care fund or savings account for oneself. Some businesses do this with their employees and sometimes pitch in to help fill the pot. There are other ins and outs of this system that you could find if you looked into it. I know that Whole Foods uses this type of health care account and I do believe it is appreciated by their employees.

      Also, when you’re paying into an account like that straight out of your pay it comes out before taxes so your taxable income decreases as well.

  • Like your blog and good idea, I will check your site later again.

  • ckhg

    To Dave Burton:

    “Provides all Americans with a tax credit for 100% of health care expenses. The tax credit is fully refundable against both income and payroll taxes;”

    Please stop misrepresenting truth with your fiction. Look up “tax credit”. A tax credit lowers the amount that you can be taxed. It doesn’t mean “free money” as you purport. If your taxable income is $30,000, you are in a particular tax bracket. If your medical bills are $5,000 then your taxable income (if this bill passes) drops to $25,000 meaning you pay taxes on $25,000 instead of $30,000. The ONLY way you would end “getting 100% of your money back” would be if your medical bills were equal to your taxable income, i.e. $30,000. This would drop your taxable income to $0 and you would therefore owe no taxes.

    Its only “refundable” against income and payroll taxes, meaning your “refund” goes up because you fell into a lower tax bracket. But its only a refund if you’ve paid taxes in the first place via withholdings.

    Please stop commenting unless you actually know what you’re talking about.

  • Geoff

    Where is the text of the bill? Why isn’t it posted here?

  • Thank You sir, for coming up with a private option that will not enforce penalties on us to get Obamacare which is government runned. You are a true patriot.

  • Matt

    This is certainly a step in the right direction. It’s probably got about as much chance of passing as the Audit the Fed bill has, which is slim…but I hope upon hope that they both pass.

    The scary thing about the healthcare bill that was just passed is that it will definitely decrease the quality of our care. Check out this article which exposes precisely why:

    Also, Dave, 100% deductible does not mean “free”…it means the government cannot profit from the dollars you spend on healthcare. What a gross misstatement. I’d go so far as to say that YOU are part of the problem; that problem being ignorance. Go get an education.

    • Matt, you are certainly correct about the health care bill which was just passed, but you are just as certainly wrong about Ron Paul’s bill. His press release doesn’t say “100% deductible.” It says fully refundable tax CREDIT for 100% of health care expenses.

      That means the federal government will refund to you ALL of your health care expenditures, regardless of whether you pay any taxes or not.

      Please don’t take my word for it. Google the term “tax credit,” or go to a dictionary site like and search for it. There’s a lot of misinformation being spread around by the Ron Paul supporters here, don’t be deceived.

      Do you remember President Reagan’s motto when dealing with the Soviets? “Trust But Verify!” I don’t ask that you trust me more than Reagan trusted the Soviets. But please take the time to consult a dictionary before accusing me of misunderstanding the terminology.


      “Liberty is not the freedom to do what you wish; it is the freedom to do what you ought.” -Lord Acton

      • B.D.Harper

        Stop relying on your assumptions and actually read the bill. It’s clear that you haven’t, and if you did we would not be having this debate.

  • “Provides all Americans with a tax credit for 100% of health care expenses. The tax credit is fully refundable against both income and payroll taxes;”

    Woo hoo! All health care is gonna be free! The federal gov’t will pick up the tab! 100%! Yippee!!!!

    OTOH, Ron Paul advised his supporters to vote for Baldwin, Nader or Cynthia McKinney rather than McCain/Palin. In other words, Ron Paul is one of the reasons we’re in this mess.


    • 1111cb

      if you do not file taxes, how can you get a credit. It is like the child tax credit. The government offers it to all Americans, but you can’t collect if you do not file. Otherwise a person who does not work has 10 kids and the governement would give them free money through the tax credit? They do other ways, but not taxes.

      I now need to double check the wording on the bill- but makes no sense.

      • In tax jargon, “refundable” means you can still get the tax credit even if you don’t pay taxes. You have to file a tax form, but if your tax credits plus your withholding exceed your taxes then you get a refund — even if you had no income tax at all.

      • Citizen


        NO NO NO
        Tax Credits are for people who pay taxes.
        We should not subsidize people who have “litters” of babies and haven’t made provisions for their Care and Feeding!


  • C. Edman

    Sounds better than the previous monstrosity, but how would a 100% tax credit help one bit? Wouldn’t that just add to more money that we do not have that the nation would have to pay out?

    I suppose this could be a stepping stone back to rationality, but this particular aspect does concern me…

    • 1111cb

      This is what it means
      you earn income
      portion goes out as taxes-
      now either the “highly efficient Federal government” can provide your health care with your taxes
      Tax credit- You get a part of the money back if you use your money as you think is efficient for your needs to get the health insurance plan you want.

      We will not solve the debt by continuing to think the federal governement efficiently runs programs. Before Obama and health reform it was an issue. As a physician Mr Paul knows this, that Medicare is already rationed and scaled back and fewer and fewer doctors accept it. Gaps are already there- check out the TV ads to buy coverage.

      It’s not the government payiong out- its a credit- if you pay no taxes, no credit back.
      The funding of health care, military and social security are killing the budget. They have to be reformed

      The fundamental shift is who is the best consumer to drive the insurance market- you or employer groups and the government

      If its your money- and the protections to the insurance companies are removed, people will buy the plans that work, demand that every dollar spent be used wisely- like does this MRI really need to be done or is it to prevent malpractice accusations? It will cut back overutilizers of care- and they will think twice about an ED if the urgent care is $1000 cheaper for a sore throat.

      • 1111cb

        is this the bill? I am having trouble finding it or details.
        Good ideas as usual get little coverage

      • 1111cb wrote, “It’s not the government payiong out- its a credit- if you pay no taxes, no credit back.”

        That’s incorrect. In tax jargon, “refundable” means you will still get the tax credit (as a tax refund) even if you don’t pay taxes. “Fully refundable” means you get it all, not just part of it, even if you don’t pay taxes.

        1111cb also wrote, “Tax credit- You get a part of the money back…”

        That’s also incorrect. This page claims that the bill provides for a fully refundable “tax credit for 100% of health care expenses.” 100% is not “part of,” it is “all of.”

        In other words, the federal gov’t will fully reimburse you for all health care expenses — essentially the same as the Canadian system, except without the paperwork reduction.

    • Citizen

      A Tax Credit means that some if not all of the SS Tax withholding would be refunded for the REAL NEEDS of the Tax Payer.
      None of us will likely ever see the any of the current 15% SS withheld from our pay checks. [employee 7.65% matched by employer]

      Government is still bankrupt regardless, but WE have a Constitutional right to our income for our SURVIVAL, and Medical is a survival necessity and fundamental as food.

  • B.D.Harper

    I have been waiting for a bill like this, Ron Paul. Thank you, sir.
    You are truly a patriot.

  • Citizen

    As usual, Dr Paul makes PERFECT COMMON SENSE!

    Counter to “Government” run health care,aka ObamaCare, is a Progressive Plan to skim billions of American’s wealth while providing only 10 cents of every Dollar in benefits.
    ObamaCare isn’t about health care, its about Government CONTROL period.

    We can only imagine what free market health care would be like WITHOUT Government red tape and constant interference.

    Thank God for Ron Paul, may God Speed his efforts to kill the giant!