Health Affairs Examines Debate over Tax Credit Proposals To Help Uninsured Purchase Coverage
Although the Bush administration's plan to use tax credits to help the uninsured purchase health insurance coverage has not received enough bipartisan support for congressional approval, lawmakers are beginning to investigate other designs for tax credit proposals, according to a report on the Health Affairs Web site. The following summarizes some of the plans that have circulated in recent years in Congress:
- Before he left the Republican party, Sen. Jim Jeffords (I-VT) introduced a plan with bipartisan support in March 2001 that offered credits of up to $1,000 for low- to middle-income individuals and $2,500 for families with no access to employer-based coverage. To aid those who could not afford coverage provided by their employers, the plan offered credits of up to $400 for individuals and $1,000 for families to cover premium costs.
- During the debate over an economic stimulus package in the wake of Sept. 11, House Democrats proposed a 60% subsidy for the purchase of individual coverage. After talks on the stimulus package broke down, Democrats proposed a 75% COBRA subsidy for "trade-displaced" workers. This proposal eventually lead to a compromise that included an advanceable, refundable tax credit worth 70% of the cost of COBRA coverage for trade-displaced workers.
The article concludes that "[t]wo years of give-and-take may have cured some Democrats of their bias against tax-based subsidies" (Cunningham, Health Affairs, 9/18). The complete article is available online.
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