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Appendix D: PETITION ON HEALTH REFORM

In late 1994, members of the Health Policy Consensus Group developed and signed a petition identifying the problems created by the current tax treatment of employment-based health insurance. They invited economists and others to join them in signing it.

The petition was circulated in late 1994 and early 1995 by Elizabeth Kern Terry and Consensus Group coordinator Grace-Marie Arnett, then president of Arnett & Co. health policy consultants. Accompanying the petition was a "Dear Colleague" letter explaining the rationale for the project. The "Dear Colleague" letter and Consensus Group petition follow, along with the names and affiliations of the signatories:

  Health Policy Consensus Group

 

November 30, 1994

Dear Colleague:

The health care reform debate over the past two years has not yet produced a clear national consensus on policy solutions to address the fundamental problems in the health sector. The debate will continue next year, and we believe that the economic community can give it direction by identifying a key distortion that leads to many problems-the tax treatment of employment-based health insurance.

A diverse group of economists and health policy analysts has developed a petition to present a diagnosis of this problem, and we ask you to join us in signing it. This petition has been developed as a volunteer effort.

We would appreciate your reviewing the petition accompanying this letter. If you agree with it, we would be pleased if you would join us in signing it. We will use this petition to demonstrate the support in the economic community for addressing the inefficiencies in the health sector created by current tax law. We plan to publicize the petition in the national media along with the signatures we gather.

Please return the petition, with your signature, address, and affiliation, to the fax number or address listed on the petition. We want as many economists and health policy specialists as possible to participate in this effort. If you believe any of your colleagues would wish to sign it as well, please share the petition with them. Thank you for considering this important national policy issue. We look forward to receiving your reply at your earliest convenience.

 

Stuart Butler
The Heritage Foundation
Debra Miller
Center for Strategic and International Studies
John C. Goodman
National Center for Policy Analysis
William Niskanen
Cato Institute
Robert B. Helms
American Enterprise Institute
Robert Shapiro
Progressive Policy Institute


 

Consensus Group Petition



Petition concerning the tax treatment of employment-based health insurance:

  Health Policy Reform: Diagnosing the Problem Reforming the tax treatment of health insurance is essential to creating a more efficient market for medical care and health insurance in the United States.

Employment-based health benefits are actually part of employee compensation. However, these health benefits are not counted as income for tax purposes. This tax policy distorts the health care marketplace. It undermines cost consciousness by disguising the true cost of insurance and medical care to employees. It artificially supports increased demand for medical services and more costly insurance. As a result, inefficient health care delivery is subsidized at the expense of efficient delivery, and cash wages are suppressed. Further, the current tax law discriminates against the self-employed, the unemployed, and those whose employers do not offer health insurance.

We support reforming the tax treatment of employment-based health insurance to promote a more efficient market in the health sector. We support restraining costs through competition and consumer incentives rather than through destructive methods such as price controls and limits on private spending set by government. 


Petition Signatories

The petition was developed and initially signed by Consensus Group members, including:

 
Arnett, Grace-MarieGalen Institute
Ferrara, PeterFormerly, National Center for Policy Analysis
Goodman, John C.National Center for Policy Analysis
Helms, Robert B.American Enterprise Institute
Hoff, John S.Health policy attorney
Kendall, DavidProgressive Policy Institute
McGeein, MartyFormerly, National Council of Community Hospitals
Miller, Debra L.Strengthening of America Commission,
Center for Strategic and International Studies
Moffit, Robert E.The Heritage Foundation
Pauly, Mark V.Wharton School
University of Pennsylvania
Tanner, MichaelCato Institute


The following economists are among those who signed the Consensus Group Petition (as of March 1995):

Alexeev, MichaelIndiana University
Allen, John W.Texas A&M University
Allen, William R.University of California at Los Angeles
Allsbrook, Ogden O.University of Georgia
Anderson, AnneliseHoover Institution
Anderson, Terry L.Montana State University
Anderton, Charles H.Holy Cross College
Andreano, RalphUniversity of Wisconsin-Madison
Antel, JohnUniversity of Houston
Aranson, Peter H.Emory University
Arnould, Richard J.University of Illinois
Austin, D. AndrewUniversity of Houston
Baden, John A.University of Washington and Foundation for Research
on Economics and the Environment
Baetjer, Howard, Jr.George Mason University
Bailey, Martin J.Emory University
Baird, Charles W.California State University at Hayward
Baker, Samuel H.College of William and Mary
Baker, Charles D., Sr.Northeastern University
Balke, NathanSouthern Methodist University
Ball, RayUniversity of Rochester
Baltagi, Badi H.Texas A&M University
Barnum, Howard N.The World Bank
Baughaum, Marshal AlanFederal Energy Regulatory Commission
Bays, Carson W.East Carolina University
Bazzoli, Gloria J.Hospital Research and Educational Trust
Bean, Richard N.University of Houston
Benham, LeeWashington University
Berger, Mark C.University of Kentucky
Bittlingmayer, GeorgeUniversity of California at Davis
Black, Dan A.University of Kentucky
Blomquist, Glenn C.University of Kentucky
Bogan, Elizabeth C.Princeton University
Bohanon, Cecil E.Ball State University
Borts, George H.Brown University
Boudreaux, Donald J.Clemson University
Bradford, David F.Princeton University
Breeden, Charles H.Marquette University
Brennen, DennisHarper College
Bronfenbrenner, MartinDuke University
Brown, Douglas M.Georgetown University
Browne, Mark J.University of Wisconsin-Madison
Browning, Edgar K.Texas A&M University
Buchanan, JamesGeorge Mason University
Burke, Thomas R.The LaSalle Group
Burstein, Philip L.Workers' Compensation Research Institute
Butler, Henry N.University of Kansas
Butler, Stuart M.The Heritage Foundation
Cagan, PhillipColumbia University
Caldwell, BruceUniversity of North Carolina at Greensboro
Calfee, John E.American Enterprise Institute
Cameron, RondoEmory University
Chaloupka, Frank J., IVUniversity of Illinois at Chicago
Chapman, Kenneth S.California State University, Northridge
Chappell, Henry W., Jr.University of South Carolina
Cheng, Wen-YuMarietta College
Chiswick, Barry R.University of Illinois at Chicago
Chiswick, Carmel U.University of Illinois at Chicago
Clark, William M.University of Oklahoma
Clarkson, Kenneth W.University of Miami
Coats, R. MorrisNicholls State University
Coelho, Philip R. P.Ball State University
Cogan, John F.Stanford University
Conant, JohnIndiana State University
Coomes, Paul A.University of Louisville
Cosimano, Thomas F.University of Notre Dame
Craig, Steven G.University of Houston
Curran, ChristopherEmory University
Daniel, KermitThe Wharton School, University of Pennsylvania
Danielsen, Albert L.University of Georgia
Danzon, PatriciaUniversity of Pennsylvania
Dauterive, Jerry W.Loyola University
Davidson, Audrey B.University of Louisville
Davis, Michael L.Southern Methodist University
DeAlessi, LouisUniversity of Miami
Decker, SandraNew York University
Delemeester, GregoryMarietta College
Derrick, Frederick W.Loyola College (Maryland)
DeVany, ArthurUniversity of California at Irvine
Dobitz, Cliff P.North Dakota State University
Dowd, Bryan E.University of Minnesota
Dranove, DavidNorthwestern University
Dunkelberg, William C.School of Business and Management, Temple University
Dvorak, Eldon J.California State University at Long Beach
Dwyer, Gerald P., JrClemson University
Edwards, FranklinColumbia University
Elliot, EvelUniversity of Texas at Dallas
Ellis, John M.University of California at Santa Cruz
Ellwood, Paul M.Jackson Hole Group
Enthoven, AlainStanford University
Entin, Stephen J.Institute for Research on the Economics of Taxation
Erickson, Edward W.North Carolina State University
Evans, PaulThe Ohio State University
Famulari, MelissaUniversity of Texas
Fand, David I.George Mason University
Feigenbaum, SusanUniversity of Missouri at St. Louis
Feldman, RogerUniversity of Minnesota
Feldstein, Paul J.University of California at Irvine
Finkler, Merton D.Lawrence University
Fishback, Price V.University of Arizona-Tucson
Frech, H. E., IIIUniversity of California at Santa Barbara
Freund, DeborahIndiana University
Friedman, MiltonHoover Institution
Froeb, LukeVanderbilt University
Gallaway, LowellOhio University
Galles, Gary M.Pepperdine University
Gardner, B. DelworthBrigham Young University
Garratt, RodUniversity of California, Santa Barbara
Gay, David E. R.University of Arkansas
Gaynor, Martin S.Johns Hopkins University
Geddes, R. RichardFordham University
Getzen, Thomas E.Temple University
Giacalone, Joseph A.St. John's University
Gifford, Adam, Jr.California State University, Northridge
Gisser, MichaUniversity of New Mexico
Glied, SherryColumbia University
Goddeeris, John H.Michigan State University
Gohmana, Stephan F.University of Louisville
Goho, ThomasWake Forest University
Goldhammer, Mark L.Rutgers University
Goldsmith, ScottUniversity of Alaska at Anchorage
Goodman, Allen C.Wayne State University
Goodman, John C.National Center for Policy Analysis
Grabowski, HenryDuke University
Greene, Kenneth V.Binghamton University
Gresik, Thomas AThe Pennsylvania State University
Griffin, James M.Texas A&M University
Grossman, HerschelBrown University
Gwartney, JamesFlorida State University
Haberler, GottfriedAmerican Enterprise Institute
Hahn, RobertAmerican Enterprise Institute
Hamermesh, Daniel S.University of Texas
Hanke, Steve H.The Johns Hopkins University
Hansen, Robert G.The Tuck School, Dartmouth College
Hanson, John R., IITexas A&M University
Harsh, Michael D.Randolph-Macon College
Hegji, Charles E.Auburn University at Montgomery
Helms, Robert B.American Enterprise Institute
Henderson, David R.Washington University
Henderson, James W.Baylor University, Henry W. Block School of Business and Public Administration
Herren, Robert StanleyNorth Dakota State University
Hicks, Donald A.University of Texas at Dallas
Higgs, RobertThe Independent Institute
Hill, P. J.Wheaton College
Hirshleifer, JackUniversity of California at Los Angeles
Hobbs, Bradley K.Bellarmine College
Hoffmeyer, UllrichNational Economic Research Associates
Hogan, Andrew J.Michigan State University
Holcombe, Randall G.Florida State University
Holt, CharlesUniversity of Virginia
Horowitz, John B.Ball State University
Horvath, JanosButler University
Horwich, GeorgePurdue University
Houston, DouglasUniversity of Kansas
Hughes-Cromwick, PaulCenter for Research on Health Care
at the University of Pittsburgh
Hunter, William J.Marquette University
Ihnen, Loren A.North Carolina State University
Ireland, Thomas R.University of Missouri, St. Louis
Jansen, Dennis W.Texas A&M University
Jensen, Gail A.Wayne State University
Johnson, Dennis A.University of South Dakota
Johnson, Ronald N.Montana State University
Johnson, ThomasNorth Carolina State University
Kamlet, Mark S.Carnegie Mellon University
Kaserman, David L.Auburn University
Kassouf, Sheen T.University of California at Irvine
Kauf, Teresa L.University of California at Berkeley
Kelley, Allen C.Duke University
Kenny, Lawrence W.University of Florida
Khorassani, JacquelineMarietta College
Klein, Daniel B.University of California at Irvine
Kosters, MarvinAmerican Enterprise Institute
Krol, RobertCalifornia State University, Northridge
Krouse, Clement G.University of California at Santa Barbara Leadership Center
Kushman, John E.University of Delaware
Lambrinos, JamesUnion College
Lee, BartholomewGolden Gate University
Lee, Dwight R.University of Georgia
Lee, Sang H.Nicholls State University
Leeds, Michael A.Temple University
Leyden, Dennis PatrickUniversity of North Carolina at Greensboro
Libecap, Gary D.University of Arizona
Lindsay, C. M.Clemson University
Lipford, Jody W.Presbyterian College
Little, MarkSAS Institute
Liu, GordonUniversity of Southern California
Logue, Dennis E.Dartmouth College
Long, James E.Auburn University
Lott, John R.University of Chicago and the University of Pennsylvania
Lowenberg, Anton D.California State University, Northridge
Luwish, Hadassah BalsamCity University of New York
Lyman, R. AshleyUniversity of Idaho
Lynch, MichaelPacific Research Institute
Macaulay, HughClemson University
Macey, Jonathan R.Cornell University
MacLeod, Gordon K., M.D.University of Pittsburgh
Makin, John H.American Enterprise Institute
Maltsev, Yuri N.Carthage College
Manning, Richard L.Brigham Young University
Margolis, Stephen E.North Carolina State University
Masten, Scott E.University of Michigan
Mathys, JohnDe Paul University
Mayor, Thomas H.University of Houston
McCarthy, Thomas R.National Economic Research Associates, Inc.
McCloskey, DonaldUniversity of Iowa
McCombs, Jeffrey S.University of Southern California
McCormick, Robert E.Clemson University
McCracken, Paul W.University of Michigan
McGreevey, WilliamThe World Bank
McGuire, Martin C.University of California at Irvine
McLure, Charles E., Jr.Hoover Institution
Medwig, Thomas M.St. Clair Hospital
Meltzer, Allan H.Carnegie Mellon University in Pittsburgh
Mennemeyer, Stephen T.University of Alabama at Birmingham
Mercer, Lloyd J.University of California at Santa Barbara
Michalak, Stanley J.Franklin and Marshall College,
Milken Institute for Job and Capital Formation
Miller, Debra L.Strengthening of America Commission,
Center for Strategic and International Studies
Miller, Mertom H.University of Chicago
Miller, OscarUniversity of Illinois at Chicago
Moberly, H. DeanAuburn University at Montgomery
Moore, Thomas G.Hoover Institution
Moore, William J.Louisiana State University
Moroney, John R.Texas A&M University
Morrisey, Michael A.University of Alabama at Birmingham
Morse, Jennifer RobackGeorge Mason University
Mueller, Curt D.Project HOPE
Mullahy, JohnTrinity College
Muth, Richard F.Emory University
Newman, RobertLouisiana State University
Niskanen, WilliamThe Cato Institute
Noether, MonicaAbt Associates, Inc.
Nunn, Geoffrey E.San Jose State University
Nyman, JohnUniversity of Minnesota
O'Hara, David J.Metropolitan State University
Ohsfeldt, RobertUniversity of Alabama at Birmingham
Olasky, MarvinUniversity of Texas at Austin
Parkman, Allen M.University of New Mexico
Parsley, David C.Vanderbilt University
Pasour, E. C., Jr.North Carolina State University
Patton, Judd W.Bellevue University
Pauly, Mark V.The Wharton School, University of Pennsylvania
Peden, Edgar A.Health Care Financing Administration
Peirce, William S.Case Western Reserve University
Peltzman, SamUniversity of Chicago
Peppers, Larry C.Washington and Lee University
Perfect, Steven B.Florida State University
Phillips, Kerk L. Brigham Young University
Pieper, PaulUniversity of Illinois at Chicago
Pipes, Sally C.Pacific Research Institute
Porter, PhilipUniversity of South Florida
Poulson, Barry W.University of Colorado
Provenzano, GeorgeUniversity of Maryland, School of Medicine
Raisian, JohnHoover Institution
Ramsey, James B.New York University
Rasmusen, EricIndiana University
Raza, M. AliCalifornia State University at Sacramento
Reed, RobertUniversity of Oklahoma
Reinhardt, UwePrinceton University
Reynolds, Morgan O.Texas A&M University
Ricardo-Campbell, RitaHoover Institution
Rieber, MichaelUniversity of Arizona
Roberts, RussellDirector of the Management Center, Washington University
Rohacek, Jerry K.University of Alaska at Anchorage
Rose, David C.University of Missouri, St. Louis
Rosegger, GerhardCase Western Reserve University
Rosko, Michael D.Widener University
Roth, Timothy P.University of Texas at El Paso
Rowen, Henry S.Hoover Institution and Stanford University
Rowley, Charles K.George Mason University
Rubin, Paul H.Emory University
Ruffin, Roy J.University of Houston
Sachs, Kevin D.SUNY at Buffalo
Sailors, Joel W.University of Houston
Sanchez, NicolasCollege of the Holy Cross
Saues, Raymond D., Jr.Clemson University
Savas, E. S.Baruch College, City University of New York
Saving, Thomas R.Texas A&M University
Schansberg, D. EricIndiana University
Schap, DavidCollege of the Holy Cross School of Pharmacy
Schuyler, MichaelInstitute for Research on the Economics of Taxation
Schwartz, MarkisGeorgetown University
Scott, Frank A., Jr.University of Kentucky
Scully, Gerald W.University of Texas at Dallas
Seldon, Barry J.University of Texas at Dallas
Shah, Parth J.University of Michigan at Dearborn
Shapiro, RobertProgressive Policy Institute
Shea, Dennis G.Pennsylvania State University
Shmanske, StephenCalifornia State University, Hayward
Showalter, Mark H.Brigham Young University
Silvers, J. B.Case Western Reserve University
Simon, Julian L.University of Maryland
Slesnick, FrankBellarmine College
Sloan, Frank A.Duke University
Slottje, DanielSouthern Methodist University
Smiley, William GeneMarquette University
Smith, Vernon L.University of Arizona
Sollars, David L.Auburn University at Montgomery
Spencer, Christine S.Johns Hopkins University
Spencer, David E.Brigham Young University
Stein, HerbertAmerican Enterprise Institute
Steindl, Frank G.Oklahoma State University
Steuerle, C. EugeneThe Urban Institute
Stoddard, Robert B.Quintiles, Inc.
Stratmann, ThomasMontana State University
Stroup, Richard L.Montana State University
Suiten, Mary C.Center for Economics Education, University of Missouri, St. Louis
Sumner, Daniel A.University of California
Svorny, ShirleyCalifornia State University, Northridge
Tanner, MichaelThe Cato Institute
Terzq, Joseph V.Pennsylvania State University
Theroux, David J.The Independent Institute
Thies, Clifford F.Shenandoah University
Thompson, HenryAuburn University
Thornton, MarkAuburn University
Thurman, Walter N.North Carolina State University
Timberlake, Richard H.University of Georgia
Tollison, Robert D.George Mason University
Tomal, AnnetteUniversity of Illinois at Chicago
Tower, EdwardDuke University
Traxler, HerbertU.S. Department of Health and Human Services
Trejo, Stephen J.University of California at Santa Barbara
Trivoli, George W.Jacksonville State University
Troy, LeoRutgers University
Tryon, Joseph L.Georgetown University
Tullock, GordonUniversity of Arizona
Ture, Norman B.Institute for Research on the Economics of Taxation
Twight, CharlotteBoise State University
Tybout, James R.Georgetown University
Utt, Ronald D.The Heritage Foundation
VanBeek, JamesBlinn College
Vander Linde, Scott H.Calvin College
Vitaliano, Donald F.Rensselaer Polytechnic Institute
Vogel, Ronald J.University of Arizona
Volpp, Kevin G.The University of Pennsylvania
Walden, Michael L.North Carolina State University
Wallace, T. DudleyDuke University (Emeritus)
Wallis, W. AllenAmerican Enterprise Institute; Past Chancellor, University of Rochester
Walters, Stephen J. K.Loyola College (Maryland)
Waters, Teresa M.Center for Health Services and Policy Research, Northwestern University
Wedig, Gerard J.The Wharton School, University of Pennsylvania
Weidenbaum, MurrayWashington University
Weier, Andrew W.Marshfield Medical Research Forum
Welch, FinisTexas A&M University
Wenders, John T.University of Idaho
Werner, Herbert D.University of Missouri, St. Louis
Wessels, Walter J.North Carolina State University
Westbrook, M. DanielGeorgetown University
Wiggins, Steven N.Texas A&M University
Wilensky, Gail R.Project HOPE; Former Director, Health Care Financing Administration
Williams, Arthur R.Cookingham Institute of Public Affairs
Willis, Carla Y.Abt Associates, Inc.
Willis, J. F.San Jose State University
Wilson, Paul W.University of Texas at Austin
Wilson, R. MarkUniversity of South Florida
Wolak, Frank A.Stanford University
Woodward, Robert S.Washington University
Wrase, Jeffrey M.Brigham Young University
Wyrick, Thomas L.Southwest Missouri State University
Zajac, Edward E.University of Arizona
Zupan, MarkUniversity of Southern California, School of Business Administration
Zwanziger, JackUniversity of Rochester
Zycher, BenjaminUniversity of California at Los Angeles, Milken Institute