Sens. Grassley, Baucus Propose Expansion of Health Insurance Tax Credits for Trade-Displaced Workers
Sens. Charles Grassley (R-Iowa) and Max Baucus (D-Mont.) have released a proposal to expand a law that provides health insurance tax credits for U.S. workers displaced by international trade to all unemployed workers, the AP/Las Vegas Sun reports (Dalrymple, AP/Las Vegas Sun, 10/9). A provision in the Trade Adjustment Assistance Act, which took effect in August 2002, provides trade-displaced workers with tax credits that cover 65% of the cost of health insurance premiums. The law includes a 10-year, $12 billion provision to provide trade-displaced workers with health and other benefits. Eligible workers can use the tax credits to purchase health insurance through COBRA, which allows unemployed workers to retain employer-sponsored coverage provided that they pay 102% of the premiums, or through state-sponsored health insurance pools and high-risk pools. Secondary workers -- those who lose their jobs because they provide services for U.S. industries affected by international trade -- also can receive the tax credits. Under the law, workers who qualify for the tax credits can receive them in advance or as a refund in their federal tax returns (California Healthline, 4/4). An estimated 200,000 workers are eligible for the tax credits under the law, according to the Treasury Department. The proposal from Grassley and Baucus would expand the law to cover all unemployed U.S. workers. According to Grassley, only 7% of unemployed workers can afford the cost of health insurance through COBRA.
The senators said that the proposal, which would cost $31.6 billion over 10 years, would help reduce the number of uninsured U.S. residents. "Is it a perfect policy? No. Does it solve the problem of the uninsured? It does not. But it's an important step in the right direction," Grassley said. However, JoAnn Volk, a legislative representative for the AFL-CIO, said that Congress should focus on efforts to ensure that workers eligible under the current law receive the tax credits (AP/Las Vegas Sun, 10/9).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.