Cutting health costs

It now appears that President Reagan will put some push behind a promising step to reduce the nation's soaring health costs. It would tax a certain amount of the health insurance premiums paid by employers for their employees.

At present these benefits are included in the employer's deductions but excluded from the employee's taxable income. The lost tax revenues, otherwise known as tax expenditures, constitute an enormous subsidy without requiring any test of need. Indeed, they favor people in higher tax brackets, while taxing everyone else more heavily to make up for the lost revenues. The breaks are a particular anomaly when it is estimated that only about a third of Americans below the federal poverty line are covered by medicaid, which is intended for those in need.

Yet Congress has given a cold shoulder to a cap on tax-free benefits at least since budget director Stockman's congressional days. When the idea was floated in Mr. Reagan's name last week, there were immediate congressional cries of ''nonstarter'' and ''ridiculous.''

To be sure, the scheme has pitfalls that need to be avoided by carefully drawn legislation. And, if the past is any guide, it will have powerful lobbying opposition from certain labor, business, and insurance groups.

But this is where Congress should not be opting out but offering refinements or alternatives. Senator Robert Dole, for example, made a very timely and appealing suggestion: that the recaptured revenue be used to finance health insurance for the jobless. This just after the Congressional Budget Office estimated that almost 11 million people no longer had health insurance because family breadwinners had lost jobs providing coverage.

Similarly, Congress could help decide whether the White House ceilings on tax-free premium benefits are realistic: $2,100 annually for a family of four, $ 840 for a single worker. Should such figures be subject to some sort of indexing? Or should total premiums be taxable? The latter would place covered workers more in the position of individuals who pay their own premiums out of taxable income.

Whatever the specifics, the thrust could be valuable in drawing attention to a key element in containing health costs. This is an awareness by health-care seekers of how much given care actually does cost. The layers of insurance currently mask these costs for many people. If they knew the costs, or paid for them out of their own pocket, would they choose the same care?

Some firms have found it cheaper simply to pay for employee health needs as these came up than to pay high premiums for full insurance. Physicians point out that instant savings could be made if patients used emergency facilities only for actual emergencies rather than for care available at clinics or doctors' offices.

There are also the more sweeping efforts to hold down costs, such as contracting for fixed overall fees as in HMOs (health maintenance organizations). Or setting advance rates for certain services, with providers allowed to profit more if they can supply the services for less.

The taxing of employees' health benefits is intended to make everyone stop and think. Employees might be prompted to choose less comprehensive plans to stay within the cap. Medical authorities warn of possible snags, such as ''adverse selection'' if employees on their own try to choose without the expertise offered by large organizations. If younger employees all go for cheaper plans the premiums for older workers on more comprehensive plans could go even higher.

But it should not be beyond the skills of Congress to fashion legislation designed to minimize shortcomings. These can be minimized as both employers and unions are motivated by the cap to search out and implement the best cost-containment programs.

The goal in all the new developments should be to make health care not only cheaper but better for all who seek it. It is the spiraling costs - three times the general inflation rate last year - which threaten to lower the quality and availability of care. Much can be done by individuals in the encouraging trend toward common sense and ''self-care'' to forestall resort to expensive services.

The element of choice must be preserved in whatever the new shape of American health care becomes. So must the assurance of care both for those who can and cannot afford it. A start can be made by helping not only workers but everyone else know how much it costs and how savings can be made.

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