Give tax credits for private coverage

In order to ensure that we reform America’s healthcare system so that it provides coverage for everyone in a sustainable way, we have introduced the Patients’ Choice Act. Our bill would update the tax code so every American would receive an upfront, refundable tax credit to purchase health insurance. This would result in quality coverage that would not only be budget-neutral but could save taxpayers at least $70 billion and states more than $960 billion over the next 10 years.

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Unlike the House and Senate bills, the Patients’ Choice Act would lower healthcare costs for America’s families and the federal government over the long term.

At a time when our debt is at an all-time high and our economic outlook is uncertain, we cannot afford to borrow and tax more just so we can spend more. The most important aspect of any reform effort must be to control the long-term cost growth of healthcare services.

The current proposals put forth by congressional Democrats would make healthcare more expensive, not less, and do not even meet President Obama’s primary measure of success for health reform — reducing the long-term growth of healthcare costs for individuals, businesses and government. Doug Elmendorf, director of the non-partisan Congressional Budget Office, has said that these proposals do not lower costs for American families, and that they will actually increase costs. In a Senate Budget Committee hearing in July, Mr. Elmendorf stated that “the legislation that I have seen so far would raise costs, not lower them.”

In order to address the problem of the uninsured, the Patients’ Choice Act would provide an upfront tax credit of $2,300 for individuals and $5,700 for families for them to use toward healthcare costs. This benefit would be available to all eligible Americans regardless of employment status or how much they pay in taxes, and would be available at the beginning of the year, so Americans would not have to wait until they file their returns to get it.

The Patients’ Choice Act avoids a one-size-fits-all, government-run program. We need to give people the means to purchase their own health insurance that fits their needs and the needs of their families. It should be portable so that a plan can stay with them through job and life changes, allowing people to access care when they need it.

Tax benefits would strengthen employee-based health benefits for millions of Americans while still allowing employers to deduct the expense of premiums. Currently, employers provide an array of benefits and services to recruit and retain the most qualified employees and establish a competitive edge over other companies. Changing the tax treatment of health benefits for employees will not change the fact that companies will attempt to differentiate themselves from the competition by offering good benefits.

Under our plan, there will be increased incentive for companies to offer these benefits in a smarter, more effective way.

For instance, companies will be forced to take more of a direct role in the long-term health of their employees to ensure that their health plan remains an affordable, comprehensive option to compete with other private market plans.

Employers will shift their focus toward encouraging wellness, prevention and disease management, making them a partner in their employees’ healthcare rather than just the financiers of their health insurance. As a company’s workforce becomes healthier, their healthcare costs decrease. It’s a win-win situation for both employees and employers.

Safeway is an example of a company that has successfully decreased its healthcare costs by creating a culture of wellness amongst its employees. The company’s “Healthy Measures” program gives employees reductions in their insurance premiums if they meet and maintain certain limits when tested for common risk factors such as obesity, cholesterol, and tobacco use. Safeway’s program is working — its healthcare costs have remained constant for the past four years, and rates for smoking and obesity are well below the national average.

Promoting wellness, prevention, and chronic disease management and helping those Americans who currently have no access to coverage in a sustainable way should be the fundamental criteria by which we measure healthcare reform proposals. Tax credits would allow us to cover everyone without expanding our federal debt and will ensure that Americans, not government bureaucrats, are in control of their healthcare.

Burr and Coburn are members of the Senate Health, Education, Labor and Pensions Committee.