Wednesday, August 25, 2004
Faith-based health-care plans explored
[Phyllis Berry Myers, Richard Swenson, M.D., Michael O'Dea, and Robert E. Moffit, Ph.D., "Why It's Time for Faith-Based Health Plans," Heritage Lecture #850, The Heritage Institute, 24 August 2004.]
The Heritage Institute recently held an interesting event on the possibilty of national health care tax credits and the potential for a return to a system of insurance based on association. Here are some excerpted comments from Dr. Robert Moffit:
The recent enactment of health savings accounts is a welcome change in the tax treatment of health insurance. It is a start in the right direction. Yet there is much more to be done in transforming the conventional health insurance market into a system that is consumer driven and genuinely competitive.
Federal tax policies largely shape the health insurance market. All roads to real health care reform ultimately lead to the reform of the tax code in the health insurance system. A simple syllogism: If you want to reform the health care system, you have to reform the health insurance markets. If you want to reform the health insurance markets, you must reform the tax treatment of health insurance. You simply cannot get to a consumer-driven, patient-centered system, which allows for the creation of faith-based health plans, without such a change. Period.
What is wrong? The current tax treatment undermines the affordability of health insurance and restricts consumer choice because the insured person has nothing to do whatsoever with the policy. The employer owns the policy; the consumer does not. It hides the true cost of health care. Actually, many people do not know what they are paying for.
What are the needed tax changes? First and foremost, a health care tax credit, preferably replacing existing tax breaks. A health care tax credit system would be portable, and it could be universal or targeted. Today, President Bush is proposing a more targeted tax credit, aimed at individuals and families without workplace health insurance. In any case, whether policymakers adopt a comprehensive or a targeted approach, that is, frankly, a matter of political prudence.
Yet the basic policy is simple enough: Give taxpaying citizens direct assistance, in terms of tax relief, for the purchase of insurance or medical services, or give vouchers to low-income people to offset the cost of insurance. My preference would be to extend this direct assistance to offset out-of-pocket medical costs and help expand access to health savings accounts. If we are going to have neutrality in the tax code, the tax treatment should apply to all of these health care options, including new options sponsored by religious institutions or faith-based organizations.
Policymakers will also have to set some conditions. If you are going to establish tax relief for insurance, the insurance should be real insurance, and that means it should cover you for catastrophic events. My own preference is that the size of tax credits should be based roughly on need. All individuals or families would qualify for a basic credit, but beyond a basic credit, you could vary its size according to income or health care needs. In other words, if you are lower income, and you have higher health care costs, policymakers may want to vary the credit amount accordingly, making it more generous. The more persons covered under private health insurance, the less dependence there will be upon government health or welfare programs. You would also have to make insurance and regulatory reform changes compatible with the new health care tax credit system.
What a lot of us in the policy community have forgotten is that, in the late 19th and early 20th centuries, when it came to insurance--old age, disability, dismemberment, and sickness benefits--there were numerous fraternal societies in the United States that sponsored insurance and social services, and they covered millions of Americans. Many of these were faith-based organizations. My personal favorite is an interesting group called the Bohemian Roman Catholic Union of Texas, serving men of Bohemian birth and descent. Their total insurance was valued at $3 million in 1925 dollars.
None of this is fanciful. America was once rich with such institutions. They were flourishing. America is, as Alexis de Tocqueville observed, a nation of "joiners." We still are today. With the change in the insurance market, coupled with the proposed change in the tax code and the establishment of equity in the way in which we deal with health options, we could revive similar institutions in an increasingly diverse 21st century America, with the possibility of uniting health insurance with the faith-based health care delivery. Think about that.
[Phyllis Berry Myers, Richard Swenson, M.D., Michael O'Dea, and Robert E. Moffit, Ph.D., "Why It's Time for Faith-Based Health Plans," Heritage Lecture #850, The Heritage Institute, 24 August 2004.]
The Heritage Institute recently held an interesting event on the possibilty of national health care tax credits and the potential for a return to a system of insurance based on association. Here are some excerpted comments from Dr. Robert Moffit:
The recent enactment of health savings accounts is a welcome change in the tax treatment of health insurance. It is a start in the right direction. Yet there is much more to be done in transforming the conventional health insurance market into a system that is consumer driven and genuinely competitive.
Federal tax policies largely shape the health insurance market. All roads to real health care reform ultimately lead to the reform of the tax code in the health insurance system. A simple syllogism: If you want to reform the health care system, you have to reform the health insurance markets. If you want to reform the health insurance markets, you must reform the tax treatment of health insurance. You simply cannot get to a consumer-driven, patient-centered system, which allows for the creation of faith-based health plans, without such a change. Period.
What is wrong? The current tax treatment undermines the affordability of health insurance and restricts consumer choice because the insured person has nothing to do whatsoever with the policy. The employer owns the policy; the consumer does not. It hides the true cost of health care. Actually, many people do not know what they are paying for.
What are the needed tax changes? First and foremost, a health care tax credit, preferably replacing existing tax breaks. A health care tax credit system would be portable, and it could be universal or targeted. Today, President Bush is proposing a more targeted tax credit, aimed at individuals and families without workplace health insurance. In any case, whether policymakers adopt a comprehensive or a targeted approach, that is, frankly, a matter of political prudence.
Yet the basic policy is simple enough: Give taxpaying citizens direct assistance, in terms of tax relief, for the purchase of insurance or medical services, or give vouchers to low-income people to offset the cost of insurance. My preference would be to extend this direct assistance to offset out-of-pocket medical costs and help expand access to health savings accounts. If we are going to have neutrality in the tax code, the tax treatment should apply to all of these health care options, including new options sponsored by religious institutions or faith-based organizations.
Policymakers will also have to set some conditions. If you are going to establish tax relief for insurance, the insurance should be real insurance, and that means it should cover you for catastrophic events. My own preference is that the size of tax credits should be based roughly on need. All individuals or families would qualify for a basic credit, but beyond a basic credit, you could vary its size according to income or health care needs. In other words, if you are lower income, and you have higher health care costs, policymakers may want to vary the credit amount accordingly, making it more generous. The more persons covered under private health insurance, the less dependence there will be upon government health or welfare programs. You would also have to make insurance and regulatory reform changes compatible with the new health care tax credit system.
What a lot of us in the policy community have forgotten is that, in the late 19th and early 20th centuries, when it came to insurance--old age, disability, dismemberment, and sickness benefits--there were numerous fraternal societies in the United States that sponsored insurance and social services, and they covered millions of Americans. Many of these were faith-based organizations. My personal favorite is an interesting group called the Bohemian Roman Catholic Union of Texas, serving men of Bohemian birth and descent. Their total insurance was valued at $3 million in 1925 dollars.
None of this is fanciful. America was once rich with such institutions. They were flourishing. America is, as Alexis de Tocqueville observed, a nation of "joiners." We still are today. With the change in the insurance market, coupled with the proposed change in the tax code and the establishment of equity in the way in which we deal with health options, we could revive similar institutions in an increasingly diverse 21st century America, with the possibility of uniting health insurance with the faith-based health care delivery. Think about that.
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