Health Plans: An Ethical Prescription

Lost amid the din of election coverage were reports on two events with long-term implications for American health care. One illustrates an emerging problem, the other signals a potential solution.

The problem concerns freedom of conscience — or the lack thereof. On Oct. 4, the U.S. Supreme Court let stand a California state court ruling that compels the state’s Catholic Charities to include coverage for contraception in its employee health-insurance plan.

Almost simultaneously, the federal government announced that next year an important new health-care option will be available to federal workers through the Federal Employee Health Benefit Program (search). Included among the 11 national and 200 local plans they can choose from is one sponsored by the Order of St. Francis that excludes coverage for medical services deemed incompatible with Catholic teaching on such issues as abortion, sterilization, contraception and artificial insemination.

Essentially, the court rulings advance the principle that employers cannot be “conscientious objectors” (search) to health-plan regulations that violate an employer’s religious or ethical beliefs. By contrast, the government’s decision advances the principle that workers should be able to choose health coverage that conforms to their beliefs.

While both decisions will have limited short-term effects, both are freighted with long-term consequences. The court rulings affect only one employer in one state, but more such cases can be expected. Similarly, the OSF plan will be available next year only to federal workers and retirees in the plan’s service area of Northwest Illinois, but in coming years, other “ethical” health plans could be offered elsewhere.

Furthermore, while both instances involve Catholic ethics and reproductive medicine, similar, future cases involving individuals with different principles and other medical practices are likely. For example, one can easily envision disputes arising over the ethics of treatments for the terminally ill or the uses of new genetic-engineering technologies.

As medical science advances, ethical considerations multiply and the likelihood of any uniform consensus on ethical norms diminishes. Was it ethical when Medicare denied reimbursement for hospice care to patients who live longer than six months? Under what circumstances is it acceptable to refuse a patient an organ transplant? Is “family counseling” a “non-medical” service, or is it a benefit consistent with good mental health and a “pro-family” ethic? What success rate must an “experimental” treatment achieve to become “medically appropriate” and covered by insurance?

Questions like these have spurred some in Congress to push for a “Patient’s Bill of Rights.” (search) But it’s highly unlikely Congress could legislate an acceptable solution.

The government has embarked on the better solution — consumer choice in a competitive market — and FEHBP is the perfect place to start. For more than 40 years, FEHBP has let federal workers select the coverage that best meets their own needs and preferences. Competing FEHBP plans already offer different coverage types (indemnity, HMO, PPO, etc.), with different benefit levels and premiums. Allowing choice based on different ethical guidelines also makes sense.

A precedent already exists. Today, investors can choose among hundreds of “ethical” mutual funds. (search) For example, funds targeting Catholics or conservative Protestants won’t invest in companies involved with abortion, but pro-life agnostics (search) are also free to buy shares. Pacifists can buy funds that won’t invest in arms manufacturers. Indeed, funds with opposing ethical views on a particular issue (such as domestic partner benefits for employees) will include or exclude a company for the same reason.

Meanwhile, there are also plenty of funds that ignore these issues entirely and make investment decisions solely on financial considerations.

Ethical health plans (search) can offer a similar solution to disagreements over medical ethics. For the vast majority of health services, such plans likely would differ little from their competitors. But on the contentious issues, they can offer customers the assurance that their practices are consistent with a customer’s beliefs.

As for employers, if Congress changed the tax-treatment of health insurance to recognize that employee health benefits are really part of workers’ wages, then the employer’s ethical dilemmas disappear. After all, how workers spend their cash wages isn’t an ethical problem for employers.

Also, by giving any health-care tax relief (search) directly to workers, government could similarly avoid contention. As with tax deductions for charitable giving, government could broadly encourage a social good (buying health insurance), while allowing individuals to chose the recipients based on their own beliefs.

Let’s not allow the problem of “conscientious objector” cases to fester. The solutions — consumer choice in health care and ethical health plans — are close at hand.

Edmund F. Haislmaier is a visiting research fellow in the Center for Health Policy Studies at The Heritage Foundation.