Bush Health Care Agenda Introduced in Congress
On May 9, Senator Rick Santorum (R-PA) and Representatives Sam Johnson (R-TX), Eric Cantor (R-VA), Paul Ryan (R-WI), and J.D. Hayworth (R-AZ) introduced bills S. 978 and H.R. 1872, the Healthcare Tax Relief for the Uninsured Act of 2005, to enact into law key elements of President George W. Bush’s health care agenda.
The identical bills would amend the Internal Revenue Code to allow a tax deduction for high-deductible health plan premiums, give small employers refundable tax credits for contributions to the health savings accounts of employees covered by high-deductible health plans, and provide a refundable tax credit for certain health insurance costs of uninsured taxpayers and their spouses and dependents.
The bills were immediately heralded as long-overdue relief by small-business organizations and groups battling to lower the number of uninsured.
Robert Hughes, president of the National Association for the Self-Employed, said “this legislation presents a multi-faceted effort to address the health care crisis in this country. With the ever-rising costs of health care, micro-business owners and their employees need affordable alternatives to the current health insurance system.”
Three Key Programs
According to a summary on Ryan’s Web site, the bills would implement three new programs to make insurance more affordable:
Premium deductibility. An individual who purchases a high-deductible health plan (HDHP) combined with a health savings account (HSA) and does not receive health insurance through an employer or government program would be allowed to deduct from his or her taxable income the amount of the premium.
Small business tax credit. Small businesses of up to 100 employees would receive a refundable tax credit for contributions they make to their employees’ health savings accounts (up to $200 for a contribution into an individual HSA or $500 for a family HSA). In order to be eligible for the credit, the employer must offer a group high-deductible health plan.
Low-income tax credit for the purchase of health insurance. In order to help low-income people get coverage, the legislation provides a subsidy of up to 90 percent of the cost of their health insurance premiums--up to $1,000 for an individual or $3,000 for a family plan. The credit would be refundable, advanceable, and assignable, meaning the money could go directly to the insurer chosen by the low-income insured.
According to Ryan, “This legislation is a way to get the consumer back in the game and gives incentive to shop around. Forty percent of those purchasing HSAs did not have insurance before. This legislation will help expand insurance to the uninsured.”
In a statement dated May 20, Santorum said the legislation “builds upon the success of HSAs by making health insurance even more affordable for those who need it most by creating refundable tax credits that can be used to purchase traditional insurance or HSAs. This health care tax legislation addresses a long-standing barrier to affordable health insurance by eliminating the unfair tax bias against individuals who purchase their own health care coverage.
“Additionally, this health care tax legislation will provide a tax credit to small businesses who contribute money to an employee’s HSA, and an above-the-line deduction for high-deductible health plans,” Santorum said.
Santorum also remarked that “more than a million people are now receiving health coverage through HSA-eligible health insurance plans, twice as many as six months ago. Also, the number of companies offering HSA-eligible plans to employees has tripled in the last six months from 29 in September 2004 to 99 today.”
Help for Families
Ryan, in a statement dated April 28, noted, “The skyrocketing cost of health insurance is the biggest domestic crisis facing most Americans today. It affects our jobs, our economy, and our families’ way of life. We have to get a handle on this problem, and the legislation we have proposed will help make quality health care more affordable and accessible ...
“With this legislation, we are honing in on the problem of the uninsured by helping those who currently fall through the cracks: those who aren’t covered through their employer, the self-employed, and small businesses that can’t afford to offer coverage,” Ryan said. “This legislation improves on HSAs and helps overcome barriers that prevent people from obtaining insurance.”
“This bill builds on the success Health Savings Accounts are having in helping people--particularly uninsured people--afford health insurance,” said Laura Clay Trueman, executive director of the Coalition for Affordable Health Coverage.
“Already, the most recent data reported by Assurant Health indicates 40 percent of individuals purchasing HSAs were previously uninsured,” Trueman continued. “With this legislation, even more of the uninsured with modest incomes would be able to afford policies.”
Joseph L. Bast (email@example.com) is president of The Heartland Institute and publisher of Health Care News.
For more information ...
The Senate version of the Healthcare Tax Relief for the Uninsured Act of 2005 is available online at http://thomas.loc.gov/cgi-bin/query/z?c109:S.978:.
To download the House version, go to http://thomas.loc.gov/cgi-bin/bdquery/D?d109:13:./temp/~bdG2oC::.