January 2003

Grant Results

SUMMARY

In 1996, the Galen Institute sponsored a conference on tax policy and health care reform, and, in 1999, published papers that had been commissioned for the conference in a book.

The Galen Institute, based in Alexandria, Va., is a not-for-profit research and educational organization specializing in health and tax policy.

Key Results

  • The conference, "A Fresh Approach to Health Care Reform," took place on March 26, 1996, in Washington. Discussion centered on 10 papers commissioned for the conference.

    More than 180 congressional leaders and staffers, business leaders, health policy experts, media representatives and other professionals attended the conference.
  • The University of Michigan Press published Empowering Health Care Consumers Through Tax Reform in 1999. The book included the commissioned conference papers, four additional invited contributions, and additional background information.

Funding
The Robert Wood Johnson Foundation (RWJF) supported this project through two grants totaling $278,293.

 See Grant Detail & Contact Information
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THE PROJECT

These two grants from RWJF supported a 1996 conference on tax policy and health care reform and the 1999 publication of the conference papers (and four additional invited contributions) in the book "Empowering Health Care Consumers Through Tax Reform" (University of Michigan Press).

The Galen Institute, an Alexandria, Va., not-for-profit research and educational organization specializing in health and tax policy, coordinated both projects. Many of the presenters/authors are members of the Health Policy Consensus Group, an affiliation of health care economists and policy analysts formed in 1993 and coordinated by the Galen Institute. The Consensus Group includes individuals representing a range of political philosophies. (See the Appendix for details.)

The Internal Revenue Code allows the value of employer-purchased health insurance to be excluded from the taxable income of employees. This tax preference for job-based health insurance favors those with higher incomes and disadvantages those who do not receive health insurance through the workplace. Millions without job-based coverage either purchase policies with after-tax dollars or remain uninsured.

The Consensus Group supports a new set of incentives through via tax credits to that would allow uninsured individuals to purchase private health coverage. Consensus Group members believe that reforming the tax treatment of health insurance is essential to creating a more efficient and equitable market for medical services and health insurance.

Consensus Group members share a belief that a belief that (1) the current reliance on job-based health insurance coverage is one reason so many Americans remain uninsured; and (2) current tax treatment of health insurance underlies many of the problems facing the private health sector today, including access to insurance, restrictions on care, and upward pressure on costs.

The unemployed and many who work at work for small businesses face the challenge of having to purchase coverage in the individual market with post-tax dollars. Further, among those people with employer-provided insurance who are eligible for the tax exclusion, the largest benefit accrues to those in the highest tax bracket.

The Consensus Group believes that the current tax structure has institutionalized and codified the problems of non-universal and non-portable coverage. Instead of instituting new federal programs and regulations to expand access to health insurance coverage, the group favors providing tax credits or other comparable fixed incentives, explicitly determined by legislation, to assist people in obtaining private health insurance. The Consensus Group offers specific advice on how the credits could be structured, including having the assistance target those in specific age, income, or other categories as deemed most appropriate by legislators.

Members believe that believe that this would not only would enable more unemployed individuals and small-business employees to buy private insurance, but it also would also make the health insurance market more competitive. That is, (i.e., more of the individuals who are "shopping" for policies means more competition — and greater efficiency).

Organizers commissioned 10 papers to be presented at a conference (ID# 026676) on tax policy and health care reform. The conference was designed to:

  • Stimulate debate on health/tax issues that have to do with improving access to and affordability of health coverage to for Americans.
  • Educate the public and opinion leaders on the ramifications of the current tax treatment of employment-based health insurance and to advance market-based health care reform.
  • Serve as a receptor for ideas from the health policy community concerning market-based approaches to health care reform and to help develop and review policy proposals.

The second grant (ID# 031244) covered the costs associated with editing and publishing the conference presentations, including the purchase and distribution of approximately 5,000 copies of the book to potentially interested parties. (See Communications.)

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RESULTS

  • The Galen Institute held its conference, "A Fresh Approach to Health Care Reform," on March 25, 1996, in Washington, D.C. More than 180 Congressional leaders and staff members, business leaders, health policy experts, media representatives, and other professionals attended. The 10 commissioned papers explored various aspects of tax-based health care reform, including:
    • The history behind current tax policy toward health insurance.
    • How does current tax policy affect, and distort, the health insurance market today?
    • How can medical savings accounts lower costs and expand options for working families?
    • How could current tax-based subsidies for health insurance be distributed more equitably?
    • How does overall tax reform provide the ideal opportunity to remedy the inequities in the tax treatment of health insurance?
    • How can we structure a better subsidy to provide more widespread access to health care?
    • What would "real" insurance look like, and what benefits does it offer in a marketplace free of government interference?
    • What would be the implications of capping or eliminating the tax exclusion for job-based insurance, and what are the alternatives for targeting subsidies to individuals?
    • How do existing public programs fail the chronically uninsured poor, and how could targeted subsidies help individuals obtain coverage?
    • What changes in tax policy are essential to creating medical savings accounts, providing tax fairness, and creating more-explicit, equitable subsidies for health insurance?
  • The University of Michigan Press published "Empowering Health Care Consumers Through Tax Reform" in 1999. The book included the ten 10 conference papers, four additional invited contributions, and additional background about this issue and the Health Policy Consensus Group. (See Communications for details.)

Communications

Under grant ID# 031244, the Galen Institute purchased 5,000 copies of "Empowering Health Care Consumers Through Tax Reform" and distributed them to all members of Congress, other key government officials, economists, journalists, think tank staff, labor union representatives, consumer groups, business leaders of large and small businesses leaders, and others likely to have an interest in this issue. The full text of the book was also made available on the Galen Institute's Web site.

The Galen Institute also held a press conference about the book at the National Press Club in Washington, D.C., on June 2, 1999, and a public forum on the book at the Cato Institute in September 1999. Several of the authors spoke about their papers at both events. The project director gave more than a dozens of presentations on tax-based approaches to health reform and has written many articles advancing these ideas.

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LESSONS LEARNED

  1. Organizations planning to publish and distribute books should be careful not to be too conservative when projecting budgets. The cost of publishing the papers in book form and distributing thousands of copies was much higher than expected, leaving no money for further promotion. The Galen Institute was forced to underwrite some of the costs as a result.

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AFTER THE GRANT

The Health Policy Consensus Group continues to meet regularly. Some of the members are now collaborating on additional papers that will are to be submitted to various health policy journals for publication.

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GRANT DETAILS & CONTACT INFORMATION

Project

Conference on the Implications of Tax Policy for Enabling Medical Savings Accounts and Other Health Care Reforms

Grantee

Galen Institute (Alexandria,  VA)

  • Conference on the Implications of Tax Policy for Enabling Medical Savings Accounts and Other Health Care Reforms
    Amount: $ 79,693
    Dates: October 1995 to November 1996
    ID#:  026676

  • Publication of Papers on Market-Based Approaches to Health Care Reform
    Amount: $ 198,600
    Dates: May 1997 to October 1999
    ID#:  031244

Contact

Grace-Marie Arnett
(703) 299-8900
gracemarie@galen.org

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APPENDICES


Appendix 1

(Current as of the time of the grant; provided by the grantee organization; not verified by RWJF.)

Members of the Health Policy Consensus Group as of 1999

Grace-Marie Arnett
Galen Institute
Alexandria, Va.

Bradley D. Belt
Center for Strategic and International Studies
Washington, D.C.

Stephen J. Entin
Institute for Research on the Economics of Taxation
Washington, D.C.

James Frogue
The Heritage Foundation
Washington, D.C.

John Goodman, Ph.D.
National Center for Policy Analysis
Dallas, Texas

Robert B. Helms, Ph.D.
American Enterprise Institute
Washington, D.C.

John S. Hoff, Esq.
Health Care Attorney in Private Practice
David Kendall
Progressive Policy Institute
Washington, D.C.

Naomi Lopez
Pacific Research Institute
San Francisco, Calif.

Merrill Matthews, Ph.D.
National Center for Policy Analysis
Dallas, Texas

Marty McGeein
The McGeein Group
Washington, D.C.

Robert F. Moffitt, Ph.D.
The Heritage Foundation
Washington, D.C.

Mark V. Pauly, Ph.D.
The Wharton School
University of Pennsylvania
Philadelphia, Pa.

Greg Scandlen
Cato Institute
Washington, D.C.

C. Eugene Steuerle, Ph.D.
The Urban Institute
Washington, D.C.

Jack Strayer
National Center for Policy Analysis
Dallas, Texas

Michael Tanner
Cato Institute
Washington, D.C.

Kevin Vigilante, M.D.
The Miriam Hospital
Providence, R.I.

Gail Wilensky
Project Hope
Bethesda, Md.

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BIBLIOGRAPHY

(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)

Books

Arnett G-M (ed.). Empowering Health Care Consumers Through Tax Reform. Ann Arbor, Mich.: University of Michigan Press, 1999.

  • Preface. "A Fair Health Insurance System," Jack Faris.
  • Introduction and Overview. "Empowering Health Care Consumers through Tax Reform," Grace-Marie Arnett.
  • "The Tax Treatment of Health Insurance: Early History and Evidence, 1940–1970," Robert B. Helms, Ph.D.
  • "What's Wrong with the Present System," Michael Tanner.
  • "High Anxiety: Working Families Need Market-Based Health Care Reform," RE Moffit, Ph.D.
  • "An Efficient and Equitable Approach to Health Reform," Mark V. Pauly, Ph.D.
  • "A Better Subsidy for Health Insurance?" C. Eugene Steuerle, Ph.D., and Gordon B.T. Mermin.
  • "Improving the System for Delivering Subsidies: Cap or Scrap the Exclusion?" John S. Hoff.
  • "Toward a Universal Marketplace for Health Care," David B. Kendall.
  • "Health Care Reform: Why Not Try Real Insurance?" Norman B. Ture, Ph.D., and Stephen J. Entin.
  • "Restructuring the Current Health Insurance Tax Subsidy to Cover the Uninsured," Kevin Vigilante, M.D., M.P.H.; Christopher D'Arcy, M.D.; and Tammy Reina.
  • "Medical Savings Accounts: An Idea Whose Time Has Come," John C. Goodman, Ph.D.
  • "Promoting a Consumer-Driven Health Care System," Senator Robert F. Bennett (R-Utah).
  • "The Role of a Universal Health Credit in Welfare and Tax Reform," Representative Thomas E. Petri (R-Wis.).
  • "The Workers' Right to Choose," Edward Ryan Moffit.
  • "Healing the Physician-Patient Relationship," Sewell H. Dixon, M.D.

Book Chapters

Arnett GM and Butler SM. "Solving the Health Insurance Program for Working Americans," In Priorities for the President, Butler SM Butler (ed.). Washington, D.C.: The Heritage Foundation, 2001. Available online.

Articles

Arnett GM. "A Fresh Approach to Oklahoma Health-Care Reform." Perspectives: A Public Policy Journal from the Oklahoma Council of Public Affairs, 7(10): 2000.

Arnett GM. "Rising Costs and Reducing Access: How Regulation Harms Health Consumers and the Uninsured." The Heritage Foundation Backgrounder, No. 1307, July 20, 1999.

Arnett GM and Schriver ML. "State Lessons in Health Regulaton." The Washington Times, July 24, 1998.

Arnett GM and Schriver ML. "Uninsured Rates Rise Dramatically in States with Strictest Health Care Regulations." The Heritage Foundation Backgrounder, No. 1211, August 11, 1998.

Arnett GM. "Rising Costs and Reducing Access: How Regulation Harms Health Consumers and the Uninsured." The Heritage Foundation Backgrounder, No. 1307, July 20, 1999.

Arnett GM. "A Fresh Approach to Oklahoma Health-Care Reform." Perspectives: A Public Policy Journal from the Oklahoma Council of Public Affairs, 7(10): 2000.

Sponsored Conferences

A Fresh Approach to Health Care Reform. March 26, 1996, Washington, D.C. Attended by 180 professionals, including Congressional leaders and staff members, business leaders, health policy experts, and media representatives. Ten presentations, an introduction, and three panel discussions. Moderator: Grace-Marie Arnett, Galen Institute.

Introduction

  • Sen. Robert Bennett (R-Utah), "Congress, the People, and Health Policy."

Presentations

  • Robert B. Helms, American Enterprise Institute, "The Tax Treatment of Health Insurance: Early History and Evidence."
  • Michael Tanner, The Cato Institute, "What's Wrong with the Present System."
  • Robert E. Moffitt, The Heritage Foundation, "High Anxiety: The Working Families' Need for Market-Based Health Care Reform."
  • Mark V. Pauly, Wharton School of Business, University of Pennsylvania, "An Efficient and Equitable Approach to Health Care Reform."
  • David B. Kendall, Progressive Policy Institute, "Toward a Universal Marketplace for Health Care."
  • C. Eugene Steuerle and Gordon B. T. Mermin, The Urban Institute, "A Better Subsidy for Health Insurance?"
  • Stephen Entin, Institute for Research on the Economics of Taxation, "Health Care Reform: Why Not Try Real Insurance?"
  • John Hoff, Galen Institute, "Improving the System for Delivering Subsidies: Cap or Scrap the Exclusion?"
  • Kevin Vigilante, M.D., Brown University School of Medicine, "Restructuring the Current Health Insurance Subsidy to Cover the Uninsured."
  • John Goodman, National Center for Policy Analysis, "Medical Savings Accounts: An Idea Whose Time Has Come."

Panels

  • Congressman Rep. Tom Thomas Petri (R-Wis.); Jim Cooper, former Congressman representative (Tenn.); and Sewell Dixon, M.D., Galen Institute, "The Political Perspective: Two Views."
  • Jack Faris, National Federation of Independent Business; Ed Moffit, Bucks County Educational Association; and Marty McGeein, National Council of Community Hospitals, "The Current System in Action."

Sponsored Workshops

"Public Book Forum on Empowering Health Care Consumers Through Tax Reform," September 22, 1999, The Cato Institute auditorium, Washington, D.C. Attended by approximately 100 Capitol Hill staffers, lobbyists, and other members of the policy community.

Presentations and Testimony

Presentations in 1999

Grace-Marie Arnett, "Saving America's Private Health Care System," at the Medical Leadership Summit, The Heritage Foundation, March 2, 1999, Washington, D.C.

Grace-Marie Arnett, "Free Market Health Reform Initiatives in Congress," for students and faculty members of the University of St. Thomas, March 8, 1999, Washington, D.C.

Grace-Marie Arnett, "Medicare Premium Support Plan," at the Second Tuesday Breakfast Club, the National Association of Manufacturers, March 9, 1999, Washington, D.C.

Grace-Marie Arnett, Social Security issue briefing, National Republican Senatorial Committee, March 17, 1999, Washington, D.C.

Grace-Marie Arnett, "Tax Reform: The Solution for What Ails the Health Care System," at the "Healthcare Reform: Empowering the Patient" seminar, Citizens Against Government Waste, March 20, 1999, Palm Springs, Calif.

Grace-Marie Arnett, "Private-Sector Perspectives," at the Capitol Ideas for Health Care Reform Annual Meeting, April 22, 1999, Washington, D.C.

Grace-Marie Arnett, "Tax Credit Approaches to Expanding Health Insurance Coverage," at the American Academy of Pediatrics Work Group on Health Insurance Coverage and Access to Care, June 12, 1999, Washington, D.C.

Grace-Marie Arnett, "Why Individual-Based Health Care Is Gaining Bipartisan Interest," at the National Association of Manufacturers Health Care Subcommittee Summer Meeting, June 30, 1999, Washington, D.C.

Grace-Marie Arnett, "Medicare Reform," at the National Counsel of State Legislators Annual Meeting, July 24, 1999, Indianapolis, Ind.

Grace-Marie Arnett, "Making Affordable Health Insurance Accessible to the Increasing Uninsured Population," at the 26th Annual American Legislative Exchange Council Meeting, August 13, 1999, Nashville, Tenn.

Grace-Marie Arnett, "The Future of Employer-Based Health Care Systems," at the 1999 Health Care Summit, The South Carolina Chamber of Commerce, October 13, 1999, Columbia, S.C.

Grace-Marie Arnett, "Access to Health Care," at the Public Policy Days, National Association of Women Business Owners Public Policy Days, September 30, 1999, Washington, D.C.

Grace-Marie Arnett, "Tax Reform: The Solution for What Ails the Health Care System," at the "Healthcare Reform: Empowering the Patient" seminar, Citizens Against Government Waste, October 2, 1999, Tempe, Ariz.

Grace-Marie Arnett, moderator of "The Future of Health Ccare in America," presented by the National Republican Senatorial Committee, October 7, 1999, Washington, D.C.

Grace-Marie Arnett, presentation of highlights from Empowering Health Care Consumers Through Tax Reform, at the American Studies Program, October 11, 1999, Washington, D.C.

Grace-Marie Arnett, panelist for at "Promoting Choice and Competition in Health Care," conference on "Medical Freedom and Integrated Patient Care: The Path to Better Care at a Lower Cost," Ethics and Public Policy Center, November 17, 1999, Washington, D.C.

News Conferences and Briefings

"A Vision for Consumer-Driven Health Care Reform," National Press Club, June 2, 1999. Attended by about 50 journalists.

Print Coverage

"One in Six, and Counting" and "A Dozen Key Players," in the National Journal, July 17, 1999.

"Medical Coverage for All: The Ultimate Congressional Odd Couple Weighs In," The Washington Post, June 18, 1999.

Television Coverage

"Debates Debates: Should Everyone Have Private Health Insurance?" Public Broadcasting Service, week of September 29, 1999.

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Report prepared by: Kristine Conner
Reviewed by: Richard Camer
Program Officer: Nancy L. Barrand
Program Officer: Stuart M. Schear

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