White House Releases Details of Tax Credit Plan
The Bush administration yesterday released the details of its proposal to use tax credits to help an estimated six million uninsured Americans purchase health coverage, the Washington Post reports. The plan's "broad outlines" were included in the budget that Bush submitted to Congress earlier this month. The plan would offer tax credits of up to $1,000 for individuals earning up to $15,000 and of up to $2,000 for families earning up to $30,000 to "defray" the cost of private insurance premiums. Individuals with incomes up to $30,000 and families earning up to $60,000 would be eligible for "smaller" credits. The White House says that the plan would cost $71.5 billion in lost tax revenue over 10 years. The tax credits could be used either retroactively, when taxpayers prepare their tax returns at the end of the year, or in advance, "to help low-income families afford monthly insurance premiums." Taxpayers who file in advance would apply for the credit with the IRS at the start of the year, and their insurers would then be reimbursed for the eligible portion of the premium from the federal government.
The Post reports that the plan would meet the "key requirements" of business, reducing "pressure" on smaller firms to offer coverage and "relying on the private insurance industry to implement it." While Republicans say the plan is a "step in the right direction," some Democrats are "concerned" that the program would make only a "small dent" in the number of uninsured. It is "unclear what form health insurance legislation will take," but the Post reports that the White House has had "extensive" talks with House Ways and Means Committee Chair Bill Thomas (R-Calif.), who, according to an administration aide is "very interested" in the tax credit plan (Morgan, Washington Post, 4/20).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.