There is little doubt that the U.S. tax system’s patchwork treatment of medical care yields significant inequities, many of which reproduce broader problems with non-tax public health policy in the United States. In Wellness and the Tax Law, Leigh Osofsky explores these inequities as they arise in the context of individuals’ spending on wellness practices that foster physical and mental well-being. Medical research shows that these wellness practices are significantly correlated with preventing, mitigating, and treating identifiable health problems, with potential savings at both the individual and societal levels. Concomitantly, tax law has deployed the concept of “medical care” in more contexts, and with less consistency. Within this dynamic context, Osofsky revisits the structure and justifications for tax benefits for health-oriented spending.

Osofsky advances three possible solutions that would address wellness practices in the U.S. tax system. First, Congress or Treasury could incorporate wellness practices into current law by relaxing or eliminating the longstanding bar on benefits for expenditures that relate to “general health.” This alternative is too hot: it yields revenue while exacerbating distributional concerns. Second, lawmakers could limit tax benefits to a narrower band of medical costs. But the result is too cold. There’s value in giving people choices about their medical care—and good empirical work to support a broader range of acceptable choices. Tax law shouldn’t fight these long-term trends. Finally, Osofsky suggests a universal, progressive “wellness” credit to enable a broad range of household spending to promote well-being. This just-right solution would align tax policy with scientific understandings of health determinants and obviate some of the definitional muddle of “medical care” under current law.

Osofsky’s third solution is attractive, inside and outside of the context of medical care. Essentially, Osofsky offers a strong justification for small-dollar universal basic income (UBI) programs. This justification aligns the economic literature on quasi-experimental UBI pilots with the medical literature on preventative and holistic health care. Moreover, a health-oriented framing of UBI may carry more weight in the political process—perhaps even on both sides of the aisle. For these reasons, Osofsky’s intervention warrants promotion among policymakers. Coupling a wellness credit with dependent and earned income credits could yield a relatively robust and nuanced floor for the United States’ generally anemic approach to social welfare.

In this context, however, the fate of the traditional medical expense deduction is uncertain. Real reasons exist to preserve this deduction as an adjustment to income, regardless of any infirmities. These reasons track the underlying issue, well-developed by Osofsky, of whether medical expenditures constitute consumption in an economic sense. To the extent that medical costs are not consumption, they play no role in the computation of personal income, and deductions or exclusions for these costs have no effect on distributional equity. From this perspective, there is no relevance to the fact that households with higher adjusted gross incomes (AGIs) claim greater medical expense deductions. If a taxpayer earning $200,000 spends $140,000 on treatment for pancreatic cancer, that person’s true income is something closer to $60,000, and they should be taxed accordingly. (That is, it’s probably reasonable to assign this taxpayer an income of $75,000, after applying the statutory AGI floor for extraordinary medical expenses.) Similarly, a taxpayer with AGI of $60,000 who receives $140,000 in charity care for the same cancer should not include any of that amount in income. Price discrimination is baked into many aspects of health care in the United States, and, setting aside conceptual questions about the scope of an ideal income tax base, a deduction for medical expenses helps rationalize some of the irregularities of traditional medical provisioning—and this function implies that a narrower medical expense deduction might function well alongside a progressive wellness credit.

Finally, the tax definition of “medical care” has an instrumental function as well as a positive one. Historically, Congress and Treasury have steered taxpayers toward more medicalized interventions and away from holistic health and prevention. Medical professionals largely have served a gatekeeper role, tempered by concerns about abuse and gaming. Tax categories shape the services people use, as well as the care that people provide. One possible lesson from Osofsky’s article is that lawmakers should engage this instrumental function more directly in the context of wellness. To the extent that individuals (and their employers, and doctors, and so on) should devote more resources to wellness practices, Osofsky’s article offers a menu of options to advance this goal, as well as a clear articulation of the policy stakes of reform versus the status quo.

Overall, Osofsky offers a clear and compelling exploration of how current understandings of wellness challenge the foundations of the tax system’s historical treatment of medical care. As the state of the art evolves in medicine, the tax system should respond. For scholars of tax and health law, as well as policymakers at the state and national levels, Osofsky’s article is essential for charting a path forward in this dynamic environment.