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
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.
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
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
in the House version of Medicare legislation now in conference
committee embedded in an otherwise bad bill. But it is unlikely
A major advantage of this approach is that each individual
would permanently own the health care coverage, independent
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
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 (AFCM). For more information visit