Introducing Tribal Health benefits Clarification Act Of 2009

Floor Speech

Madam Speaker, I rise to introduce the ``Tribal Health Benefits Clarification Act of 2009'' with Representatives Devin Nunes, Nick Rahall, Joe Baca, Shelley Berkley, Mary Bono-Mack, Dan Boren, Tom Cole, Wally Herger, Dale Kildee, John Kline, Jerry Lewis, Ben Ray Luján, Kevin McCarthy, Betty McCollum, Frank Pallone, Earl Pomeroy, George Radanovich, and Heath Shuler. This bipartisan legislation will clarify that medical care and health coverage provided by Indian tribes for their members, as well as health care provided by the Indian Health Service, or IHS, are not taxable under the Internal Revenue Code.

The federal government has a longstanding policy of providing medical care to Indians. To effect this policy, 25 U.S.C. section 1601 states a ``major national goal of the United States is to provide the quantity and quality of health services which will permit the health status of Indians to be raised to the highest possible level,'' and specific authorization for IHS is provided in 25 U.S.C. section 13.

However, statistics on the health status of Native Americans compared with the general population are alarming. Native Americans have a life expectancy that is nearly 5 years shorter than other Americans, and death rates from diseases such as tuberculosis, alcoholism, and diabetes that are many times higher than in the general population.

Despite this overwhelming need, funds appropriated for IHS programs have been consistently inadequate to meet even basic health care requirements. In fact, IHS has found that per beneficiary, the IHS received 40 percent less funding than the average cost of a mainstream health insurance plan, thus limiting health care services and contributing to poorer health outcomes among the population it is intended to serve.

To address the needs of their people in the face of the IHS funding shortfall, many Indian tribal governments have dedicated portions of their revenues to funding health care programs. The IRS and federal courts have consistently held that payments made under similar social benefit programs for the promotion of general welfare are not taxable. However, the test to determine whether a benefit falls under this doctrine is based on facts and circumstances and is difficult to apply. In addition, no formal guidance has been issued by the IRS to assist in these determinations. Statutory language is needed to clarify the tax treatment of these medical care benefits.

The ``Tribal Health Benefits Clarification Act of 2009'' would provide a statutory clarification that, consistent with the federal government's policy of providing health care services to Indians, neither health care provided by IHS nor medical care provided by an Indian tribe to its members is subject to income taxation.

I urge my colleagues to join us in supporting this important bipartisan legislation to further the federal government's stated goal of raising the health status of the Native American community.

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