Cornell Journal of Law and Public Policy


Health insurance, Healthcare financing


President Donald J. Trump has said he will repeal the Affordable Care Act (ACA) and replace it with health savings accounts (HSAs). Conservatives have long preferred individual accounts to meet social welfare needs instead of more traditional entitlement programs. The types of "medical care" that can be reimbursed through an HSA are listed in § 213(d) of the Internal Revenue Code (Code) and include expenses "for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body."

In spite of the broad language, regulations and court interpretations have narrowed this definition substantially. It does not include the many social factors that determine health outcomes. Though the United States spends over seventeen percent of gross domestic product (GDP) on "healthcare", the country's focus on the traditional medicalized model of health results in overall population health that is far beneath the results of other countries that spend significantly less.

Precision medicine is one exceptional way in which American healthcare has focused more on individuals instead of providing broad, one-size-fits-all medical care. The precision medicine movement calls for using the genetic code of individuals to both predict future illness and to target treatments for current illnesses. Yet the definition of "medical care" under the Code remains the same for all.

My proposal for precision healthcare accounts involves two steps -- the first of which requires permitting physicians to write prescriptions for a broader range of goods and services. The social determinants of health are as important to health outcomes as are surgical procedures and drugs-or perhaps more so according to many population health studies. The second step requires agencies and courts to interpret what constitutes "medical care" under the Code differently depending on the taxpayer's income level. Childhood sports programs and payments for fruits and vegetables may be covered for those in the lower income brackets who could not otherwise afford these items and would not choose to spend scarce resources on them if they could. This all assumes that the government takes funds previously used to subsidize the purchase of health insurance under the ACA (or allocates new funds) and puts the funds in individual accounts so the poor or near poor have money to pay for these expenses.

Section I of this Article will explore the current definition of medical care, which excludes the social determinants of health from "healthcare" spending. I then address how precision medicine has changed the types of services and treatments that it makes sense to reimburse for each individual. If efficacy can vary from person to person based on genetic code, then it also can vary depending on environment. There is an opportunity to not only vary the types of "medical care" that can be reimbursed or deducted within the traditional range of services and drugs, but also outside of that range.

Section II addresses the historical shift towards health financing through individual accounts, and specifically through HSAs. If this is the only avenue for health reform in the next few years, I advocate using it to engage in the type of experiments that are typically only possible under the cover of tax expenditures. My proposal for precision healthcare accounts moves the government to experiment with individual social spending that can lead to improved overall health outcomes.

Finally, in Section III, I address two dichotomies that affect any healthcare proposal: (1) entitlement programs v. grants-in-aid, and (2) pooled insurance v. consumer-driven health plans (CDHPs). In the end, I argue that an entitlement method of funding precision HSAs along with pooled insurance subsidized by the government is the most realistic resolution to these dichotomies. Only a broad-based entitlement to funding for all healthcare expenses (medical and social) allows for significant improvements in overall population health.