Health Care’s ‘Third Rail’

A political ‘third rail’ is an issue that’s so highly ‘charged’ that it’s pretty much political suicide to touch it. Literally speaking, the third rail that’s used to power trains carries hundreds of volts of electricity, resulting in electrocution and likely death for anyone who touches it. Some of the best known ‘third rail’ issues are, of course, Social Security reform, tax increases and gun control, but now I think we can add to the list: ending the tax exemption on employer-provided health benefits.

This topic showed up on my radar screen again today for two reasons. First, today’s New York Times Op-Ed by David Brooks brings this hot-button issue into full view. Here’s a brief excerpt, but it’s important to read the whole article:  “On May 12, the Senate Finance Committee held a hearing on health care reform. There was a long table of 13 experts, and a vast majority agreed that ending the tax exemption on employer-provided health benefits should be part of a reform package. They gave the reasons that experts — on right or left — always give for supporting this idea. The exemption is a giant subsidy to the affluent. It drives up health care costs by encouraging luxurious plans and by separating people from the consequences of their decisions. Furthermore, repealing the exemption could raise hundreds of billions of dollars, which could be used to expand coverage to the uninsured. Democratic Senator Ron Wyden piped up and noted that he and Republican Senator Robert Bennett have a plan that repeals the exemption and provides universal coverage. The Wyden-Bennett bill has 14 bipartisan co-sponsors and the Congressional Budget Office has found that it would be revenue-neutral.” Unfortunately, as Brooks continues, the Wyden-Bennett bill isn’t gaining traction among congressional leaders or in the Obama Administration…a variety of strange-bedfellow lobbyists have made it clear that this direction is a ‘third rail’ for them.

The second reason for this issue to rise to the surface for me came in a report from the National Issues Forums community on “Coping with the Cost of Health Care.” This is the title of the most recent NIF issue guide on health care, and the report summarizes the responses of forum participants across the country. As a researcher and writer in NIF work myself, I know full well how difficult it is to create an issue guide that includes the most important and urgent parts of a public dilemma for effective, small group conversations. What was striking to me today, however, was the apparent absence of the tax exemption on employer-provided health benefits in the issue guide and/or in the report. Let me be clear…I’m not trying to find fault, and I haven’t scoured the report, but I’m pretty sure that if this topic had been addressed in the forum it would have created enough of a stir to be included as a major finding in the report.

Here’s my guess: some topics–like this exemption on health care benefits–are so deeply embedded in our psyche that they are generally not questioned…at least not until the problem grows dire enough to look everywhere for ways to pay for truly inclusive health care. When these topics are eventually brought into the open…whoa! You know immediately why it could be considered to be a ‘third rail’ issue. If, however–and here’s the big IF–if we really, really want to find solutions to our most difficult problems, we’ll be willing to address every highly charged topic that has even the most remote chance of making a contribution in the conversation…no-holds-barred! As long as we’re willing to let political-correctness censor the way we talk about issues, we’ll have to settle for mediocre public discourse and ineffective public policy.

For those who are interested in more on this topic, here are a couple more links:
U.S. Senator Ron Wyden…website info on “Healthy Americans Act”:
http://wyden.senate.gov/issues/Health_Care.cfm
NIF Report on “Coping with the Cost of Health Care”
http://www.nifi.org/stream_document.aspx?rID=14664&catID=6&itemID=14663&typeID=8

 

Archived Comment:

I find myself torn on the issue. On the one hand, I am the beneficiary of non-taxed healthcare benefits and it really, really helps my budget (particularly since I’m not affluent). On the other hand, I wonder if taxing this sacred cow might in fact be a cheaper option for raising revenue than some of the other options being proposed. Sure, it’ll cost me, but maybe not as much as some of the other ideas out there. I also must keep in mind that subsidizing healthcare is already costing me. Doctors and hospitals are currently forced to pass on expenses to customers to make up for the people who can’t pay them. (I don’t fault healthcare providers for doing this – they need to make ends meet. Every business does this.) Determining the most cost effective method for providing healthcare requires looking at everything – including sacred cows – and it’s high time we bit the bullet and did it.

 

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