Health Insurance Tax Break Increases National Debt, Stifles Economy
Many Americans enjoy a little recognized tax benefit: employer health insurance. The benefit costs billions of dollars and discriminates against those who don't carry employer insurance.
A cartoon featured in some eastern Tennessee newspapers on Father’s Day was both sad and sobering. A young girl was shown graciously offering Uncle Sam a gift, exclaiming, “Happy Father’s Day! I got you something,” to which Uncle Sam reciprocated by saying, “I got you something too,” and handing her a gigantic ball and chain with the words “$21 TRILLION NATIONAL DEBT.”
No one knows for sure exactly what will happen if our government continues to accumulate more debt. Since “the borrower is slave to the lender,” the liberties we have been blessed to inherit will most likely be threatened for future generations if we don’t start doing something about it now.
Many people probably have various insights from their own experience about ways to reduce this debt. As a direct primary care (DPC) physician in Greeneville, Tennessee who has not accepted health insurance in more than 18 years, I have been in a unique position to see how insurance for nonemergency outpatient medical care not only increases our country’s debt but also how it stifles our overall economy and thus reduces tax revenues from which to resolve this debt.
Americans carry insurance for unexpected catastrophes such as car accidents, burned houses, and inpatient hospital care. We don’t purchase it for routine car or home maintenance, so why do we have it for everyday medical care? The reason is, unlike other insurance, it is a pretax expense enjoyed primarily by large and medium-sized corporations wielding great political influence.
Most people don’t know this tax exemption for employer-provided health insurance adds about $350 billion to our national debt each year while discriminating against the self-employed and employees of small businesses, many of whom can’t afford health insurance yet were cruelly forced to pay Obamacare penalties until Congress and President Donald Trump ended them in 2017.
The increasing number of families choosing membership in Christian health care sharing ministries don’t benefit from this tax exemption. As a matter of justice both to future generations who will be responsible for this debt and to the many uninsured, Congress should eliminate this tax favor. While they are at it, Congress should remove the tangle of insurance regulations so companies will have to compete by offering consumers the opportunity to buy policies that make sense.
Magic of Price Transparency
When Americans pay directly for outpatient medical care at facilities that make their pricing transparent, they pay much less than they would at facilities that don’t.
I have observed that patients and health care providers today don’t seem to know what—or even if—insurance will pay for elective outpatient care. My DPC patients who pay me directly are not confused by such uncertainty. They make me cost-justify diagnostic strategies and therapeutic interventions before they are undertaken. As a result, lab tests purchased at my clinic to evaluate fatigue cost about $500 less than what insured patients have told me they have had to pay other providers after receiving bills from them in the mail for amounts not covered by their insurance.
My uninsured and high-deductible insured patients regularly drive to private, for-profit facilities in nearby towns and cities to save around $100 on X-rays, several hundred dollars on ultrasounds and cardiac stress tests, more than a thousand dollars on CT and MRI scans, and several thousand dollars on colonoscopies. One patient traveled 900 miles to save more than $10,000 on outpatient surgery at the Surgery Center of Oklahoma, which posts all-inclusive prices on its website and offers patients a way to pay for such procedures on credit.
These examples show that when Americans pay directly for outpatient medical care at facilities that make their pricing transparent, they pay much less than they would at facilities that don’t.
Diverting Needed Workers
Since DPC practices such as mine don’t bill insurance, we require three fewer employees per physician than those that do. That means with roughly 350,000 primary care physicians in this country, health insurance drains approximately one million dependable, hardworking people from our labor force today, when there is less than 4 percent unemployment. Many jobs that are unfilled as a result are arguably of greater service to our fellow citizens than the settling of small medical claims that require a ridiculous and onerous level of documentation in electronic medical records.
From my perspective, simply eliminating the tax exemption for employer-provided health insurance would bolster the economy by reducing health care costs and supplying much-needed labor to our nation’s employers while leveling the taxation playing field for all Americans.
Most important, eliminating this tax break would help to reduce our national debt and preserve our legacy of freedom for generations to come.
Robert Berry, M.D., (firstname.lastname@example.org) practices medicine in Greeneville, Tennessee and is a member of Samaritan Ministries International and owner of DirectMD Greenville.