House Democrats Question White House Proposal to Provide Tax Credit for the Uninsured
Bush administration officials yesterday faced "sharp questioning" from Democrats on the House Ways and Means Committee over a White House proposal for a health insurance tax credit to reduce the number of uninsured, CongressDaily reports (Rovner, CongressDaily, 2/13). The proposal would use $89 billion over 10 years to provide health insurance tax credits to workers who do not have employer-sponsored health coverage but do not qualify for public insurance. Under the proposal, families with annual incomes less than $25,000 would qualify for a $3,000 tax credit. Families with annual incomes between $25,000 and $60,000 would qualify for a smaller tax credit based on income. Individuals with annual incomes less than $15,000 would qualify for a $1,000 tax credit. Individuals with annual incomes between $15,000 and $30,000 would qualify for a smaller tax credit based on income. The proposal also would help states establish purchasing pools to reduce the cost of premiums (California Healthline, 1/31).
Rep. Pete Stark (D-Calif.), ranking member of the Ways and Means health subcommittee, called the plan "inadequate," adding, "There's no way we can say we're giving them decent coverage at a price they can afford." Jeff Lemieux of the Progressive Policy Institue, a "long-time backer" of health insurance tax credits, said that the administration's proposal "could in fact disrupt employer-based coverage and should not be enacted in its current form." In testimony submitted for the record, Massachusetts Institute of Technology professor Jonathan Gruber wrote that while the proposal would likely cover approximately 3.3 million previously uninsured people, an additional 1.4 million people would lose their insurance because it would lead employers to drop coverage. Gruber wrote, "The net reduction in the uninsured is fewer than two million, or 5% of the existing number of uninsured." But a new analysis by the White House Council of Economic Advisers concluded that the proposal "could provide good, affordable insurance to almost all of those eligible," according to Mark McClellan, a White House health adviser. That study also found that while many people with coverage would use the credit, the effect on the employer-based health insurance system "would be negligible," McClellan said. CongressDaily reports that Republicans defended the proposal "as a starting point for discussions" (CongressDaily, 2/13).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.