David Kendall

Recent Articles

Health Reform, Meet Tax Reform

The current tax treatment of health benefits makes no sense. A feasible strategy for health reform should now put tax reform at its center. But which kind?

I n last year's abortive health care debate, the Clinton administration's fatal error was to make a universal entitlement to coverage the sine qua non of reform. The public rejected the administration's argument that its program would reduce costs while eliminating inequities and inefficiencies. To get reform back on track, Democrats need to recognize that controlling costs is the key not only to expanding coverage but to preventing its further erosion. Rising cost is the one health care crisis that affects the insured and uninsured equally. It leads insurers and providers to reduce or deny care, and it absorbs public resources otherwise available to expand access. Furthermore, the government can check the cost spiral simply by refusing to subsidize it. Federal tax policy distorts private choices about health care, driving up costs and distributing subsidies inequitably. Reforming the tax exemption for employer-paid health benefits can make insurance markets more competitive, hold...