Health and Taxes: Even Worse Than Death and Taxes
By Richard E. Ralston
September 29, 2003
It is insulting enough when the government
celebrates your death by taxing away your wealth or your business.
Much more damaging are the taxes on the money you need to stay
alive.
Medicare legislation now pending before a
conference committee in Washington would continue to punish those
who pay their own way, and deceive those who think they can get away
with forcing everyone else to pay for their health care expenses.
The wealthiest government employees or corporate
executives who receive health care insurance as a part of their
compensation package receive this benefit on a tax-free basis. Any
one who pays their own health insurance premiums or medical bills
must struggle to wring these payments from income that is fully
taxed. This practice transcends unfairness and lack of equity. It
also inflates the cost of health care for everyone.
Those who are provided with their health care as
a tax-free benefit have little incentive to spend those health care
dollars wisely. After modest co-payments or deductibles, the sky is
the limit. Those spending their own money have much more motivation
to pursue the most efficient use of their health care resources. Yet
the government taxes—and thereby discourages—that behavior. It
rewards the cost-is-no-object approach to health care insurance.
It is hard to understand the reasoning behind
this approach. Perhaps there are those who would prefer that
everyone be dependent on someone else—or on the government—for their
health care. Given the expense explosion that results from “free”
health care, perhaps there are those who would prefer that every
detail of our health care be regulated by the government. There
often appears to be a great fear in government circles of autonomous
individuals left free to pay for their own health care, and to make
their own decisions about it.
One thing the government could most easily do to
bring the cost of health care within the reach of almost all
Americans would be the expansion of unrestricted tax-free medical
savings accounts (MSA’s). Such accounts can cover most or all of
everyone’s routine medical expenses. In conjunction with
high-deductible, low-premium insurance for medical emergencies and
long-term care, these accounts make health care affordable. We all
would then be freed from the tax burden of supporting a huge
government health care establishment. (Very restricted MSA’s exist
today, but the legislation creating them will expire at the end of
2003. A small provision for this type of account was passed in the
House version of Medicare legislation now in conference
committee—embedded in an otherwise bad bill. But it is unlikely to
survive.)
A major advantage of this approach is that each
individual would permanently own the health care coverage,
independent of any employer and unencumbered by government
regulators. This makes it completely portable so it can follow each
individual through a career and into retirement. Actually, it would
extend beyond retirement as any unused savings could be passed on to
heirs. Such ownership would provide far more security than a
financially unsupported government “entitlement,” real peace of
mind, and true independence.
This independence provided by tax freedom for our
health care expenses would, more importantly, leave us free to make
our own health care choices and to accept or reject the
recommendations of the physicians and surgeons that we choose. That
is a far more important benefit than the actual dollar savings that
tax equity for health care expenses would provide.
Let there be no doubt about it. What the
government pays for it also controls. When the government makes
itself the primary provider of anything, it commands it. It owns it.
A government that provides for all of your body’s health care needs
will ultimately think and act as if it owns your body. Those who are
uncomfortable with that idea need to understand that they need to
reject the illusion of government handouts, and demand the right to
spend their own dollars—free of tax—to provide for their own lives
and health.
Richard E. Ralston is Executive Director of Americans for Free Choice in Medicine.
Copyright © 2003 Americans for Free Choice in Medicine. All rights reserved.
For reprint permission, contact AFCM.
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