GALEN INSTITUTE
With all the special interests allied against free-market health care reform, conservatives have made little progress toward putting individuals rather than corporate or government bureaucrats in charge of health care decisions. But a Republican administration working with a Republican Congress could bring about a sea change in this policy area. The Galen Institute is the only free-market think tank solely dedicated to making that sea change happen.
"The Galen Institute, Inc., is a not-for-profit, free-market research organization devoted exclusively to health policy," says the group. "It was founded in 1995 by Grace-Marie Turner to promote a more informed public debate over individual freedom, consumer choice, competition, and diversity in the health sector. The Galen Institute believes that consumers and their physicians should have authority and responsibility over their own health care decisions."
Turner was inspired to start Galen after the Clintons attempted to enact their socialized medicine scheme, she said in a recent interview. "I was involved in opposing what I considered to be a major loss in freedom," she said. "I worked for the Heritage Foundation after starting Galen and then worked full-time at Galen after 1997. We are the only think tank on the conservative side that specializes in health policy issues."
"A consumer-driven market will lower costs, promote innovation, expand choice, and increase access to better medical care," says the institute. "The vibrant free market will encourage research and innovation and provide better access to new medical technologies. Updating outmoded tax policy will facilitate greater access to more affordable health insurance."
"The government at all levels controls 45% of what is spent on health care in this country," said Turner. "The 55% from the private sector is highly regulated. People don't really have market freedom, and this is one-seventh of the economy." She said that the employer-based model for providing health insurance is outmoded and inefficient. Because insurance premiums are tax free when provided by employers, she explained, "it gives people a huge incentive to get their health insurance through their employers. But now people switch jobs often, have their own businesses. . . . It isn't working anymore. It also means people have no idea of how much they're really paying for health care. They don't realize the cost in lower wages, because, of course, health insurance is a part of their compensation packages. It encourages people to over-consume. Employers have to consider health insurance part of what it costs them to hire you."
Medical Savings Accounts (MSAs) are a great idea but are not necessarily for everybody, said Turner. "I don't want to . . . say everybody has to do it this way," she said. "We advocate consumer decision-making." Under a typical MSA plan, an employee receives a certain amount of money to cover health expenses each year from his employer. Excess funds are invested. Any amount not used by retirement is the employee's to keep, thus giving the employee control over his health care dollars and an incentive to save money. The employer also provides catastrophic health care coverage for very expensive medical contingencies.
"It makes sense," said Turner. "I don't buy homeowners' insurance to repaint the front door. I buy it in case my house burns down." The problem: Unlike with standard employer-based health insurance, the government does not allow most employers to offer tax-free MSAs.
"You've got to evolve to a new system," said Turner. "President Bush has proposed refundable tax credits for health insurance. He is planting a seed for a new idea."
"Mr. Bush has proposed providing refundable tax credits to the uninsured to help them purchase private health insurance," wrote Turner in an article on Galen's website. "The credits would be worth up to $1,000 a year for individuals and $3,000 for families." Those amounts are far below what the average employer-based policies cost but not too far from what individuals are buying, she wrote. "For example, the on-line brokerage, eHealthInsurance, did a survey of 30,000 people who purchased policies last year and found the average individual policy cost $1,871 and $3,899 for families."
Turner said that politicians since Richard Nixon have sought to have the government take over the health care system, and reversing that trend is an uphill battle. "It's about power," she said. "What they really, really want is to control the health care system so people feel they have to come to them as politicians if they want something."
Galen may be reached at P.O. Box 19080, Alexandria, Va. 22320 (703-299-8900; fax: 703-299-0721; e-mail: [email protected]; website: www.galen.org)
