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The Tax Man is Dead; Long Live the Health Plan!

By: Ron E. Peck, Esq.

People (especially politicians) refer to “healthcare,” when in fact they are referencing health insurance.  When they talk about the cost of healthcare, they don’t mean how much a provider charges for the care they provide.  Instead, they are referring to the premiums, co-pays, and deductibles for which the patient will be responsible out-of-pocket.

Those aren’t the costs of healthcare; they are the costs of health insurance.  Health insurance isn’t healthcare; it’s one way by which we pay for healthcare.

Call it a scapegoat, or something else, but it has been too easy to say that what’s wrong with health care is what’s wrong with insurance, instead of looking at what’s wrong with thought processes and behaviors of both providers and patients as well.   Note… health plans and insurance carriers are not free of blame; but they aren’t alone.  When we hyper-focus on fixing health insurance, rather than assign blame to all three – providers, patients, and payers – all because it’s politically expedient to point a finger solely at the least popular of the three, we eliminate our ability to actually address what’s wrong with our system.

What’s more, not only are health plans, health insurance, and employers easy targets for ire (and reform), but they are also convenient agents for execution of unpopular policies.  Recent history is full of examples of the Federal government utilizing employers, health plans, and health insurance carriers as arbiters of its will, instead of mandating certain behaviors.


Collective Funding for Baseline Healthcare

Insofar as the ACA is concerned, there existed an intent to collect funds from those people who were less likely to utilize healthcare services, pool those funds, and use those funds to purchase healthcare for those citizens that need it – and could not afford it were they to pay for it themselves.   Consider a similar scenario: Not all households include school-age children, however, all households pay taxes – a portion of which is in-turn used to fund the public school system.  In that example, all people – both those who utilize the schools and those who do not – pool their funds to pay for a good only some people actually use.  This is viewed as a duty of every citizen to help our neighbors and benefit society as a whole.

The same mentality could have been used to justify a tax, to raise funds for the purpose of purchasing a defined, baseline level of healthcare for those who could not afford it themselves (and did not have private coverage).  Rather than implement such a tax – something that is never a popular political maneuver – lawmakers instead opted to make employers and insurance carriers their deputy tax-collectors, forcing all citizens to “pay a tax” (or, in this case, pay a premium), pooling their funds in a fashion no different than the aforementioned public-school example.  Indeed, what is insurance if not a communal piggy bank, into which all insured persons submit their payments, and from which those in need draw necessary funds to pay for a loss?

This is one example of a private institution (health insurance) being used by lawmakers to enforce a public demand (communal funding for the purpose of purchasing health care).  Just as many citizens balk at paying for a public school system they don’t use, so too did many protest when they were forced to “contribute” to a health insurance pool they rarely – if ever – need.  Unlike the public-school example, however, (where the ire is directed at “the tax collector”), here – much ire was (and still is) directed at health insurance carriers and employer sponsored health plans.


Collections from COVID-19

More recently, in response to the COVID-19 pandemic, employer-sponsored health plans and health insurance carriers are being ordered to pay for (or reimburse the) cost of over-the-counter COVID-19 tests.  Again, private employers and insurance carriers are being forced to administer the “will of the people,” rather than utilize municipal funds to pay for those tests.

For many, there exists a belief that if and when tax dollars are spent on things such as health care or COVID diagnostic tests, the cost trickles down to the taxpayers.  Thus, limiting the things for which our taxes pay helps to keep our taxes contained.  Those same people believe, however, that when their employer’s self-funded health plan or health insurance pays for those same things, the cost does not trickle down to the individual. 

How strange, and how wrong that belief is.

I find it particularly odd that the same person who opts to pay for a fender-bender out of pocket, rather than file a claim with their auto-insurance carrier – for fear of increasing their premiums next year – is more than happy to have their health insurance carrier pay for their COVID tests, and over-priced aspirin at the hospital.  Indeed, those expenses – paid now by health plans and carriers – will result in increased contributions and premiums next year, and thus, we the people pay the costs eventually.

Whether it be with tax dollars or insurance dollars, we pay for it.  The only way to reduce what we pay, is reduce the cost of the things for which we pay.