Present tax law only allows physicians to deduct pro-bono services they render to a 501-c3 charitable services institution. They are not allowed to deduct medical services provided in clinics and offices to low-income individuals who don’t have insurance and are eligible for Medicaid and CHIP. The Physician Pro Bono Care Act is a simple measure that corrects this gap. The federal legislation could well help more than 70 million Americans currently enrolled in Medicaid and CHIP, including 1.79 million Georgians.
Reducing the demand on Medicaid through the measure would provide relief to states like Georgia, which are struggling with growing Medicaid expenses. In 2016, Medicaid expenditures totaled $9.8 billion in Georgia. While the federal government picked up the larger portion of that figure under the program’s funding formula, the state’s share came to $3.1 billion, representing 16 percent of the overall outlays in Georgia’s budget.
Federal and state governments would benefit from the Physician Pro Bono Care Act because it would save billions of dollars in Medicaid expenditures. Pro-bono services rendered by doctors would translate into a significantly larger payout if the same service was performed by the same doctor and the billing was handled through Medicaid services. For example, $6.6 billion could be saved a year in national Medicaid disbursements for emergency room visits alone, according to an estimate by AMAC. That figure is based on a scenario in which the 7 million Medicaid patients who visited an emergency room once in 2016 at the average Medicaid payout cost of $1,100 would have instead received pro-bono treatment from a doctor at the cost of a deduction of roughly $50.
While the measure is not a panacea for the hundreds of billions of dollars spent on Medicaid each year, it’s an important part of the solution when considering burgeoning costs. Importantly for states like Georgia, it provides a pressure relief valve against the need to expand Medicaid.
Aside from the dollars-and-cents benefits, the bill encourages lower-income people to form traditional patient-doctor relationships that can contribute to better health outcomes. That relationship can be critical in seeking preventative care before conditions become acute. Without access to a primary care physician, many patients put off seeking medical help until their ailments become so serious that they have no choice but to make emergency room visits. Emergency room care can be 20 times as expensive as physicians’ office visits.
In an era in which some doctors are no longer accepting Medicaid patients because of the convoluted and time-consuming requirements of the program, the Physician Pro Bono Care Act offers doctors an opportunity to treat lower-income patients. While they would get a tax deduction that is a lower dollar amount than if it had gone through the Medicaid system, the advantage is how they would be shredding bureaucratic red tape.
This bill relies not on ideology of any stripe, but on a creative solution that will help ensure that our most vulnerable Americans have access to the care they need, from the doctor they choose. Georgians deserve strong bipartisan support from their congressional delegation around this commonsense bill and Reps. Loudermilk, Allen and Hice are to be commended for co-sponsoring this important piece of legislation.
Dan Weber is the president and founder of the Association of Mature American Citizens (AMAC), a conservative advocacy group.