Addressing the Growing Need for Organ Donation

In New Jersey, legislation under consideration would grant individuals a state income tax deduction of up to $10,000 for unreimbursed travel expenses, lodging expenses, and lost wages incurred in making a live organ donation. While medical risks and lack of compatibility can’t be completely eliminated, providing a voluntary incentive to increase the pool of available organs can help increase the number of successful matches, and in turn save lives. The legislation is similar to ALEC’s Organ Donation Tax Deduction Act.

ALEC’s 2005 model legislation was inspired by the true story of Marty Monroe, a truck driver from Menasha, Wisconsin. Mr. Monroe lost $6,000 in pay when he donated a kidney to his eight-year-old son Cody. An ALEC legislator, Wisconsin Representative Steve Wieckert, realized that Mr. Monroe’s situation wasn’t unique—on average, a liver donor forfeits $4,246 in lost wages, and a kidney donor loses an average of $4,124 in wages. Representative Wieckert’s first-of-its-kind legislation quickly became a model for other states. Although federal law bans outright payment to organ donors, it excludes reimbursement for certain expenses related to donation—including travel, lodging, and lost wages.

The income tax deduction, not to be confused with an income tax credit, would reduce an individual’s taxable income by up to $10,000. A tax credit, on the other hand, would directly reduce an individual’s tax liability. However, in neither case—a deduction or tax credit—would a donor be able to profit from a donation. Rather, existing legislation allowing deductions or credits simply help defray actual costs incurred in making a living donation.

Sixteen states currently have laws allowing for a tax deduction or credit for live organ donation. While the majority of organ donors in the U.S. are deceased, 44% are living. Living donors not only donate kidneys and bone marrow, but are also capable of donating tissue from a liver, pancreas, intestine, or lung while still leading healthy lives. And the need for organ donation from all donor sources is on the rise.

According to the U.S. Department of Health and Human Services, the gap between the number of patients waiting for a transplant and the number receiving a transplant has widened substantially over the past two decades. The number of people on the waiting list has climbed by more than 90,000 while the number of donors has increased by less than 10,000. HHS estimates 18 people die each day waiting for an organ transplant, 12 of them in need of a kidney.

With over 113,000 individuals currently awaiting organ transplants, legislators from across the spectrum and across the country recognize that meeting this extraordinary need should not require donors to suffer undue financial burdens. Implementing voluntary incentives that can save lives while preserving individual liberty can serve as a model not only for organ donation, but for all of health care delivery.