The Effectiveness of Tax Policies in Incentivizing Living Kidney Donations in the U.S.

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Most people with Chronic Kidney Disease (CKD) agree that the organ shortage will not be resolved through cadaveric (deceased ) donations alone, but rather in conjunction with living donations. Currently, compensation for kidneys is considered unlawful, but a legitimate alternative can come in the form of a tax incentive. The Organ Donation and Recovery Improvement Act (H.R. 3926), which was signed into law on April 5, 2004, has a provision allowing States to offer tax deductions for organ donors. As of July 26, 2013 seventeen states have adopted tax deductions of up to $10,000, and another three States have pending legislation and approximately ten more States are considering similar ordinances.

Recommended Reading: What makes Donors say "Yes" to Donating their Kidneys

Although the selling of organs is illegal in the United States, these tax deductions offer a live kidney donor help to defray potential medical costs, lodging costs and wages lost while making such a selfless gift. The theory behind these state ordinances is that the tax breaks will increase the live donor pool. However according to a new study published in the American Journal of Transplantation, there is "no statistically significant effect of these tax policies on donation rates."

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One possible reason why the tax benefits don't seem to be generating more live kidney donors, according to the study, is that the value of the tax break generally is too low to defray the actual medical costs faced by donors. For example, a tax deduction of $10,000 for a family of four at the median income in the state of Wisconsin translates to an actual cash value of just more than $600, notes the study. Compare that to the financial burden for a living kidney donor in the U.S., which ranges from around $900 to almost $3,100, depending on the type of surgical approach. Even when the donor's costs are at the extreme low end of the procedure scale, the tax break may cover only a fraction of the true total costs faced by the donor.

Recommended Reading: How Can The Personal Out-Of-Pocket Costs for Kidney Transplant Be Defrayed?

In order to further incentivize living donors to take action, States might consider the deduction amount or changing the tax compensation to a tax credit, which is more valuable because it would lower the donor's tax bill dollar-for-dollar.  Apparently, no tax benefit will be enough to get most people to donate their kidneys for remuneration (payment) alone. But, it will remove disincentives to allow more altruistic donors to come forward by eliminating the following:

  1. Risk of dying and having no life insurance
  2. Concerns about long-term healthcare and (in the US) having no health insurance
  3. Lost wages and other costs from being out of work for the surgery and recovery
  4. Costs of travel to the transplant center for the evaluation and the surgery

Recommended Reading: Can Non-Directed Kidney Donor Chains Play Key Part In Contributing To Additional Yearly Transplants?

So the question remains, "Would you be more likely to receive a kidney from a living donor if s/he was given a tax break? If so, what type and level of tax benefit do you believe it would take?" KidneyBuzz.com would love to hear your thoughts about this important matter by commenting.

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References:  

 "Tax Breaks For Organ Donors." Bankrate, Inc.

 "The Impact of Tax Policies on Living Organ Donations in the United States." Wiley Online Library. American Journal of Transplantation

"The Case for a Regulated System of Incentives for Living Kidney Donation." Ncbi.nlm.nih.gov. Annals of The Royal College of Surgeons of England