Affordable Care for More Americans

This blog has explored how Obamacare affects Americans with serious illnesses such as multiple sclerosis, end-stage kidney disease, and AIDS, and earlier discussed its effect on Medicaid recipients. I'm tired of complaining about what doesn't work. How about a post on what would?

We've tried meeting America's health care needs through big business (any company that can insure millions against a risk as expensive as cancer is "big" by any definition). Now we're trying to meet America's needs through a loveless marriage between big business and big government--but the honeymoon is over and the bride is talking to her lawyer. Progressives who held their noses to support Obamacare are now pushing for big government to do the job alone, through a single-payer system. While that makes sense (to them) in theory, the latest polls suggest that putting it into practice could be impossible for the time being.

Those polls suggest that neither the Republicans nor Democrats will have a commanding majority before 2016, leaving Obamacare the law of the land no matter how many "glitches" affect how many Americans. Big goals (repeal and replace! Switch to single payer!) will fire up the base on the left and right, but that won't help middle-of-the-road, middle-class folks for the next three years. We aren't going to get anything that can guarantee affordable care for all Americans--so how about finding something that would provide affordable care for more Americans? Especially if all we have to do is find something that works and make it work better?

There is already something that works. Obamacare provides an explicit exemption for healthcare sharing ministries ("healthshares"). Senator Max Baucus of Montana included a provision that recognizes not-for-profit healthshares as a valid way to comply with the Patient Protection and Affordable Care Act. That provision, which can be found at 26 USC 5000A(d)(2)(b), allows certain tax-deductible charities to share the costs of medical care among people with shared religious or ethical beliefs. More than 170,000 families currently participate in the three groups that were intentionally grandfathered in (Medi-Share, Samaritan Ministries, and Christian Healthcare Ministries) and membership seems to be rising since the new law took effect.

Healthshares aren't big business or big government, but they have been successful at meeting needs for more than thirty years. Between what members share and donors give, they have paid the bills for hundreds of thousands of patients--despite the fact that they are prohibited by law from paying salesmen, setting specific underwriting amounts, or using many of the other tools that the insurance industry has developed to serve their customers. Healthshares have succeeded with no direct government assistance and without the tools that insurance companies use--because members helping members is a better way to pay.

The Secular Coalition for America opposed Senator Baucus' plan to include healthshares in the law--but not because they disagree with healthshares. They wrote:

For centuries, numerous mutual aid societies in the United States have sponsored insurance and social services organized around a shared ethnic background, occupation, geographical region or religion. For example, in 1787 African Americans released from slavery organized a nondenominational benefit society called the "Free African Society of Philadelphia." By stating that only people belonging to religious mutual aid societies can be exempt from mandated health insurance this provision privileges Christian Americans over non-Christian Americans.

I couldn't agree more. That's why we need a Federal Health Union Act, which would amend the language of 26 USC 5000A(d)(2)(b) to include any not-for-profit organization united by any shared interests with an objective effect on health. Under such a law, Vegans as well as Hindus could share the health savings of a meat-free diet, while smokers could band together to cover their care without paying the 50% penalty Obamacare imposes.

Expanding healthshares to Vegans and smokers would make the law more just, but to make it more effective we need two additional changes. First, healthshares need to be able to use the same tools that health insurance companies need without apologizing for it or dancing around state regulations. Healthshares need to be expressly exempt from state insurance regulations in the same way that federal credit unions are exempt from state banking regulations.

That is why the Federal Health Union Act would be directly modeled on the Federal Credit Union Act of 1934, which created federally-chartered not-for-profit credit unions during the banking crisis of the Great Depression. The National Credit Union Association has been able to keep credit unions serving customers for many years--and a National HealthShare Association could ensure financial stability and consumer protection for not-for-profit health cooperatives.

The problem with allowing healthshares to compete directly with for-profit plans is that insurance companies are now required to accept all comers, even those with pre-existing conditions. This drives up the cost of healthcare, but low-income Americans are offered subsidies to help them cover the cost of these "free-market plans." If healthshares don't have to pay for pre-existing conditions, they won't be competing with for-profit plans--they'll be taking advantage of them. On the other hand, if plans sold on the exchange get subsidies and healthshares don't, it's the insurance companies that are taking the advantage.

The Federal Health Union Act funds pre-existing conditions and low-income insurance without forcing anybody to buy anything they don't want or pay for anything they detest. It does so through a "matching-funds" approach to fund-raising. Taxpayers who donate money to a federally-chartered healthshare will be eligible for a 50% tax credit for their gift. This saves taxpayers money (it costs taxpayers 50 cents to subsidize the poor and sick) and takes the politics out of healthcare. The Susan G. Komen Foundation could raise a lot more money for breast cancer in a very short time--and so could patients with less politically-prominent diseases, like Lyme Disease and multiple sclerosis.

Changing the tax law is not a simple matter--but in this case, it would be worth it. Medicare is a financial time bomb, and Medicaid has even more problems. Among other things, changes to Medicaid are raising the demand for healthcare while cutting the supply. Tax credits for healthshares could move millions of people off Medicaid onto non-profit plans, especially if not-for-profit hospitals can operate their own healthshare. A hospital healthshare could dramatically reduce the number of uninsured patients in a service area, reducing the amount that other patients pay. With a 50-cent-on-the-dollar tax credit, local businesses would have every reason to build good will by helping out their neighbors.

That's all it takes to provide affordable care for more Americans, including the poor, sick, and elderly. All we have to do is (a) expand healthshares, (b) allow them to compete directly with for-profit insurers, and (c) save 50 cents on donated dollars. It's a plan that Americans can understand, politicians can support, and the President can sign.

I hope to share this with my Senator (Joe Manchin of West Virginia) and Congresswoman (Shelley Moore Capito) at the earliest opportunity. If you think your representative might be interested in co-sponsoring such legislation, leave a comment explaining why. If we all work hard and work together, we can help millions of our neighbors in distress.