The main reason for the present situation is that federal tax law favors employer‐​sponsored health insurance. Employer‐​sponsored health insurance is fully excluded from taxation, but individually purchased health insurance is not. The result is that individuals have diminished ability to choose their health care plans, providers, and treatments.

Americans’ lack of health freedom can be measured objectively using the Health Freedom of Choice Index. This study uses that index to compare three types of health insurance plans: the Federal Employee Health Benefits Program, Medicare, and medical savings accounts (MSAs). According to the index, MSAs offer individuals the most freedom to select their health care providers and benefits. Last year’s Kassebaum‐​Kennedy bill limited the number of MSAs to 750,000 nationwide. This year Congress will grant the MSA option to only 390,000 of 37 million Medicare recipients.

The way to restore freedom in health care is to provide every American a tax credit for health insurance, whether purchased privately or through an employer or other organization. A universal tax credit, along with legislation to make MSAs available to all Americans, would help put choices about health care coverage back in the hands of the people.