Final answer:
Self-employed individuals, including business proprietors, can deduct 100% of their medical expense plan costs from their taxable income. This helps them manage the cost-sharing aspects of their health insurance plans, such as deductibles and co-payments.
Step-by-step explanation:
The proprietors of a business can deduct the cost of a medical expense plan because they are considered self-employed individuals. The highest percentage that may be deducted for self-employed individuals is 100%, allowing them to mitigate some of the financial burdens associated with health insurance costs. This deduction is important in managing the out-of-pocket expenses that come with various forms of cost-sharing such as deductibles, co-insurance payments, and co-payments which are part of most health insurance plans. These cost-sharing mechanisms are designed to discourage moral hazard by ensuring that individuals have a monetary stake in their healthcare consumption.