Health Care Heaven

A bipartisan health care reform that’s also a good idea.

These days, few issues are as polarizing as health care.

To discover a genuinely bipartisan health care reform bill can be downright astonishing. Like encountering a three-legged dog playing fetch. You rub your eyes and ask: Is that even possible?

And if you find that the bill is actually a good idea, you pinch yourself.

The other day I pinched myself. I read H.R. 1752, introduced in April by Rep. Mike Kelly, R-Pa. The bill has already been cosponsored by more than one in five House members, from both sides of the aisle. And for good reason.

In plain English, the one-sentence Kelly bill would allow millions of people of faith to save tax-free for their medical expenses. It would do this by opening up the popular Health Savings Accounts program to hundreds of thousands of Americans who have been inadvertently shut out of it because of their religious practice. Specifically, the bill would amend the tax code to treat membership in a health care sharing ministry as equivalent to owning a high-deductible health plan, for purposes of having an HSA.

(A deductible is the amount you pay before your insurance kicks in. Encouraging high deductibles encourages consumers to be more careful shoppers, which in turn helps to reduce health care costs for everyone.)

An HSA is a tax-favored savings vehicle first created in 2003 and today enjoyed by more than 15 million Americans. With an HSA, you owe less in taxes, because contributions to the account reduce your taxable income. Also, you owe no taxes on money going into the account, and you owe no taxes on money coming out of the account for medical purchases. (Non-medical withdrawals are subject to tax and a 20 percent penalty.) So it’s a tax-relief triple whammy, one that actually helps bend the health care cost curve downward.

But there’s a problem, and this is the reason for Kelly’s bill: To qualify for an HSA, you have to have a high-deductible health plan, which by definition is insurance. Millions of Americans decline to carry insurance for religious or ethical reasons. These Americans can never qualify for an HSA. It’s not that they’re insurance slackers or free riders; they just choose to provide for their medical expenses in a different way. Kelly’s bill would fix this problem by allowing those who participate in a recognized health care sharing ministry to have an HSA.

A health care sharing ministry is a voluntary charitable association whose members choose to “bear one another’s burdens” (Galatians 6:2) instead of relying on traditional health insurance. Members help pay each other’s medical bills as a form of personal religious ministry. Nearly 500,000 Americans in more than 170,000 households currently belong to one, according to the Alliance of Health Care Sharing Ministries, which represents two of the oldest and largest of the ministries.

These ministries are not insurance, because they don’t assume any financial risk or make guarantees. But they do meet one of the goals of insurance by providing peace of mind. They’re basically a modern version of the old mutual aid society that once flourished in immigrant communities and working-class neighborhoods across America. They offer a safety net for Americans who can’t afford insurance and do not qualify for full government health care subsidies.

Health care sharing participants are free to choose their own doctors, unlike in traditional insurance plans, which can suffer from narrow networks of doctors and hospitals. And doctors do not refuse to treat health care sharing participants, because, unlike participation in certain government programs, health care sharing carries no stigma.

Recognizing health care sharing as an acceptable alternative to insurance, Congress in 2010 amended the tax code to declare that membership in a bona fide health care sharing ministry satisfies the Affordable Care Act’s mandate to purchase insurance. Unfortunately, Congress neglected to amend the part of the tax code that governs HSAs, to ensure that ministry members are treated equally there too. That oversight would be rectified by Kelly’s bill.

Health Savings Accounts and health care sharing are naturally complementary – a match made in heaven:

  • Both offer an affordable alternative to traditional insurance.
  • Both provide a health care safety net.
  • Both reduce uncompensated care costs.
  • Both help reduce overall health care costs.
  • Both encourage a socially salutary spirit of self-reliance.
  • Both make it a little easier to follow one’s conscience and practice one’s faith.
  • Both are completely voluntary.

In uniting the two concepts, Kelly has done something astonishing. He has come up with a non-partisan, non-ideological, non-controversial health care reform that would actually make the world better.

Is that even possible?

Dean F. Clancy, a former senior official in the White House and Congress, writes on U.S. health care, budget, and constitutional issues. Follow him at DeanClancy.com or on Twitter @DeanClancy.


[Originally published at USNews.com, August 21, 2015. @USNewsOpinion. Reposted at DeanClancy.com.]

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