[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3076 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 3076

   To amend the Internal Revenue Code of 1986 to allow individuals a 
 credit against income tax for the cost of insurance against negative 
  outcomes from surgery, including against malpractice of a physician.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 27, 2005

   Mr. Paul introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to allow individuals a 
 credit against income tax for the cost of insurance against negative 
  outcomes from surgery, including against malpractice of a physician.

    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 ``Freedom From Unnecessary Litigation 
Act of 2005''.

SEC. 2. CREDIT FOR PURCHASE BY PATIENT OF INSURANCE AGAINST NEGATIVE 
              OUTCOMES RESULTING FROM SURGERY.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
credits) is amended by inserting after section 25B the following new 
section:

``SEC. 25C. COST OF INSURANCE PURCHASED BY PATIENT AGAINST NEGATIVE 
              OUTCOMES RESULTING FROM SURGERY.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to the cost of negative outcomes insurance 
covering the individual or the spouse or any dependent (as defined in 
section 152) of the individual.
    ``(b) Negative Outcomes Insurance.--For purposes of this section, 
the term `negative outcomes insurance' means insurance covering any 
negative side effect of surgery, including those caused by malpractice 
from the action or inaction of a physician.''.
    (b) Conformimg Amendment.--The table of sections for such subpart A 
of such Code is amended by inserting after the item relating to section 
25B the following new item:

``Sec. 25C. Cost of insurance purchased by patient against negative 
                            outcomes resulting from surgery.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 3. EXCLUSION FROM GROSS INCOME FOR MEDICAL MALPRACTICE AWARDS 
              GRANTED IN BINDING ARBITRATION.

    (a) In General.--Section 104 of the Internal Revenue Code of 1986 
(relating to compensation for injuries or sickness) is amended by 
redesignated subsection (d) as subsection (e) and by inserting after 
subsection (c) the following new subsection:
    ``(d) Medical Malpractice Binding Arbitration Awards.--In the case 
of damages awarded for medical malpractice in binding arbitration, 
gross income does not include such damages (whether for lost wages or 
otherwise).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to damages awarded after the date of the enactment of this Act.
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