A New Road to Health Security

Congress is likely to continue a major, long-term debate on taxes, both the level of taxes and the structure of the tax code-while the number of Americans without health insurance continues to rise and soaring deductibles, co-pays, and premiums shift more costs of illness onto families.

Congress should at long last solve the problem of the uninsured as part of major, longrange tax changes. It should combine Repubican interest in major tax changes with Democratic interest in solving the health insurance problem. A tax-based Health Security program could break the sterile logjams of how to solve this problem. Anyone who looks at the health care proposals in Congress today can see that either they (1) cannot be enacted or (2) they don't really work to help the lower income uninsured or the middle income whose insurance policies are deteriorating year-by-year. Joining the interests of both parties could finally provide Americans with Health Security.

The tax laws should bc changed to provide a 'credit' against 'reasonable' out-of-pocket medical expenses and 'eligible' insurance premium purchases that exceed 10% of taxable income (or 5% for those below 200% of poverty phased up to 10% at 300% of poverty). The tax system would be used to guarantee Health Security to all tax filers at all times, regardless of where they live, whether they are employed, or whatever happens in their lives. No one will ever need to spend more than 10% of their taxable income on health care. The tax code will provide a national catastrophic insurance program, without changing or threatening any existing public or private programs that people are happy with.

While this proposal encourages insurance, it also leapfrogs the issue. Increasingly insurance doesn't work for lower and middle income families, so let's go to the heart of the issue-protection against expensive health costs. If tax credit proposals can work to buy insurance, they can work to directly provide what insurance is meant to buysecurity.

Under this proposal, anyone who needs to see a health provider and who feels that they can't pay for it, may ask a 'participating' doctor or hospital for a government-issued 'IOU' which will be filled out with the services provided and the charges. The health care provider can immediately submit the IOU to HHS and be reimbursed 100%-once the computers check that it is an eligible service at a reasonable rate. In the next year, when the person files their tax return, the accounts will be reconciled-that is, the computer will report on the total amount of care received minus the deductible (5 to 10% of the individual's taxable income), which the individual should have paid directly to providers. If the person has not paid their 5-1 0% share of last year's medical expenses, the amount will be collected through the tax system.

Lots of questions, of course, just as in any comprehensive health care proposal. But with good will, Republicans and Democrats can unite to solve the problems.

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