Heritage Foundation Leadership for America

The Federal Employees Health Benefits Program has long been a model of consumer choice, most recently with the inclusion (albeit contested) of Health Savings Accounts as a coverage option. As Nina Owcharenko writes, HSAs were established by Congress as part of the Medicare Modernization Act of 2003 and allow consumers who select high-deductible insurance coverage to pay for their health care spending out of tax-free accounts, thereby eliminating the bias towards employer-sponsored coverage and increasing individual choice.  

Now federal employees in Illinois will have the opportunity to prove right Robert Moffitt's prediction that HSAs not only allow consumers to make their own economic decisions about health care but also could lead to "a real diversity of plans and options, increasingly tailored to personal needs and values--including ethical, moral, or religious values." A new plan offered by the Franciscan-sponsored OSF Health for federal employees "specifically excludes payment for contraceptives, abortion, sterilization and artificial insemination," making it the first FEHBP plan to conform to Catholic tenets, or those of any specific religious or ethical orientation.

The New York Times reports:

The Bush administration has broken new ground in its "faith-based" initiative, this time by offering federal employees a Catholic health plan that specifically excludes payment for contraceptives, abortion, sterilization and artificial insemination.

The new plan, announced last week, combines two White House priorities. It is part of a $1 billion project seeking to involve religious organizations in all types of federal social programs. At the same time, the plan is a new form of coverage - a health savings account combined with high-deductible coverage - that is being promoted as a centerpiece of President Bush's health care policy.

The plan, which will begin enrolling federal workers in 31 Illinois counties in November, is sponsored by OSF Health, a unit of the Sisters of the Third Order of St. Francis, which runs the St. Francis Medical Center in Peoria and five Roman Catholic hospitals in Illinois and Michigan.

As expected, some closeminded critics are already up in arms. Frances Kissling, president of Catholics for a Free Choice, a pro-abortion group, criticizes the program as "substandard medical care" because it does not include "services [that] are generally covered within our society.'' But many insurance providers do not cover abortion or contraception. Moreover, those participating in the OSF plan could still purchase reproductive services using funds in their HSA. And finally, Kissling's contention is nonsensical: federal employees in Illinois can still choose from a wide variety of other health plans, including several offered by OSF Health. OSF's Franciscan plan simply gives federal employees another option in an already competitive market; any employees choosing the Franciscan plan will know well what they're entering into.

In many ways, faith-based plans are akin to 'ethical' mutual funds. These funds, which can be, among others, Catholic- or environmentalist-oriented, invest only in assets and debt that meet stringent ethical guidelines. Environmentalist funds, for example, avoid oil companies, paper producers, and fast food (to be honest, we're not sure what they invest in). The Ave Maria mutual funds, popular among Catholics, tout that their shareholders "don't have to sacrifice financial performance for their pro-life and pro-family beliefs." Given the cross-subsidies inherent in health insurance, we fail to see how ethically-oriented health insurance is much different.

Faith-based health care presents a workable solution to the crisis currently facing employer-based health care. Stuart Butler has emphasized that must ?create alternative pools for employees of small firms," and, much like fraternal organizations that in the late 19^th and early 20^th centuries, faith-based organizations, along with unions and community groups, would be ideal sponsors of such pools.

The new plan for federal employees in Illinois is a revolutionary first step towards merging individual choice, ethical understanding, and religious belief to provide quality health care. And what happens when these take off? Moffit has an answer:

We could have a natural marriage of...large pooling and personal freedom, and a commitment to quality care combined with adherence to traditional ethical, moral, and religious values. What could be better?