House Committee Passes Bill That Would Expand Health Plan Options for Trade-Displaced Workers

The House Ways and Means Committee yesterday passed a tax bill (HR 1528) that includes language that would expand the type of health plans eligible for a tax credit established last year to help some U.S. workers displaced by international trade to purchase health insurance, CongressDaily/AM reports. However, in response to objections by some Democrats, committee Chair Bill Thomas (R-Calif.) said that lawmakers might change some of the tax credit language before the bill goes to the floor for debate (CongressDaily/AM, 4/4). At issue is a law enacted last August that allows uninsured, trade-displaced workers a refundable tax credit to cover 65% of the cost of their health insurance premiums. Eligible individuals can use the tax credits to continue employer-sponsored health insurance through COBRA, the 1986 Consolidated Omnibus Budget Reconciliation Act, which allows unemployed workers to retain coverage by paying 102% of the premiums, or through state-sponsored health insurance purchasing pools and high-risk pools. Secondary workers -- those who lose their jobs because they provide services for American industries affected by international trade -- can also receive the tax credits (California Healthline, 8/7/02). The law requires that insurance pools arranged by states must not exclude people with pre-existing conditions and must offer premiums comparable to those offered by other health plans, CongressDaily reports. But a provision added to the tax bill by Rep. Jim McCrery (R-La.) and approved by the Ways and Means Committee would waive those requirements.

According to aides to Republicans, the change would expand access to the tax credit for people who live in states where no insurance pools comply with the requirements of the current law. However, some Democrats objected to the language because they said it would "let states and insurance companies off the hook" for the current criteria, CongressDaily reports. The changes would affect between 250,000 and 300,000 U.S. residents, according to CongressDaily (Vaughn, CongressDaily, 4/3). A coalition of lobbying groups yesterday sent a letter to lawmakers expressing "strong opposition" to the provision. "[W]hile cloaked as 'consumer choice,' [the provision] would severely weaken the consumer protections included in the carefully negotiated health care provisions of the Trade Adjustment Assistance program enacted last year," the letter states. It adds that the measure would allow insurers to "cherry pick" members and would "undermine" efforts to negotiate health care. The AFL-CIO; Consumers Union; International Association of Machinists and Aerospace Workers; National Health Law Program; Center on Budget and Policy Priorities; Families USA; International Union, United Auto Workers; and National Partnership for Women and Families signed the letter (letter text, 4/3).