Mark Trahant: Taxation of tribal health benefits

Health | Opinion

Monday, September 21, 2009

"There is near universal agreement: the Indian Health Service needs more money. At the National Indian Health Board Consumer Conference last week several members of the U.S. Senate and House were critical of the historic under-funding of IHS. These were Democrats, Republicans, some representing Indian country constituents, others from districts with no reservations and few tribal members. Yet they communicated the same message: the United States made a health care promise to Native Americans and it’s wrong to fund a system with substantially less money than what is spent per person on federal prisoners.

The Indian health system’s funding is so low that many patients are counted as part of the uninsured population in government data.

The Senate Finance Committee’s health reform concept paper put it this way: “The IHS itself has stated that its funding does not allow it to provide all the needed care for eligible Indians. As a result, some services are ‘rationed,’ with the most critical care given first. … The reality of this under-funding is that money for contract health services does not last the entire year, forcing IHS to limit services to circumstances involving a ‘loss of life or limb’ circumstance. This predicament is so common in Indian Country that many tribal members fear that if they need care after June, they will be forced to go without.”

The Obama administration at least added 13 percent to its IHS funding request. But it’s a small step and neither the Executive Branch nor the Congress has made funding parity a priority or even a proposal.

So many tribes have stepped up and contributed their own money to improve health care in Indian Country. This ranges from paying extraordinary medical bills of tribal members to purchasing health insurance.

Hurrah. But this is where this story takes a strange twist: The government’s response to those innovative approaches is to treat this generosity as a taxable event. The IRS wants 1099 forms sent to individual members. (Perhaps a tax bill should be sent to the U.S. government instead.)"

Get the Story:
Taxing the logic of tribal health benefits (Mark Trahant 9/21)