HFMA VIEWS

Richard L. Clarke, DHA, FHFMA
President and CEO, HFMA

President Bush’s healthcare plan deals with short-term issues, but does not address the broader goal of covering the uninsured. Bush’s plan recognizes the important inequities caused by the non-deductibility of health insurance premiums purchased by individuals. This part of the tax code is illogical and unfair to those who must purchase health insurance on their own, when it is not provided to them. By recommending that the value of employer-provided health insurance premiums be taxable income, Bush’s plan may cause individuals who receive such coverage to recognize better the value and cost of this benefit. These short-term features may be positive as long as they are coupled with other changes. 

One change is to regulate better the individual insurance marketplace to ensure rationality and fairness.  Currently, the individual insurance policies do not have the same insurability or transportability features that group policies have. As such, they are more risky and less desirable than group policies. The second change is to ensure that employer provider health insurance is not damaged by these changes. Incentives and/or penalties for employers to continue to provide coverage is a must.

A long-term fix to the problems of providing coverage to the uninsured must begin with comprehensive proposals that address the root problem and gain the acceptance of all major stakeholders. Fixing the tax code in the short term may be a step toward better rationality, but it should not distract us from the longer term issue of providing coverage for the uninsured.