Final answer:
The medical expense deduction is intended to provide financial relief for patients with significant healthcare expenses, allowing them to deduct certain costs from their taxes.
Step-by-step explanation:
The medical expense deduction is designed to provide relief for patients who have incurred substantial healthcare costs. This deduction allows individuals who itemize their tax returns to deduct eligible medical and dental expenses that exceed a certain percentage of their adjusted gross income. The concept of a deductible is an amount that the insurance policyholders must pay out of pocket before the insurance coverage pays anything, and it applies to various types of insurance plans, including fee-for-service and health maintenance organization (HMO) plans. These forms of cost-sharing, including co-payments and deductibles, are intended to discourage moral hazard by ensuring that individuals have a financial stake in the healthcare services they use.