Bipartisan Bill Would Offer Health Coverage Tax Credits

Sens. James Jeffords (R-Vt.), Bill Frist (R-Tenn.) and Thomas Carper (D-Del.) plan to introduce legislation next week that would provide up to $2,500 in an annual refundable tax credit for low-income families to help them purchase health insurance, CongressDaily reports. Titled the Relief, Equity, Access and Coverage for Health Act, or REACH, the bill expands on the CARE Act (S2320), a measure that Frist and Jeffords proposed last year but that never passed out of the Finance committee. The new version of the bill would add more money to the tax credit and a new category for eligibility. Under the earlier version of the bill, families could receive for a $2,000 tax credit and, under the new category, families who have access to but have not been able to purchase employer-sponsored insurance would receive a $1,000 tax credit to purchase health coverage. Frist said, "The thrust of this bill is to lower that barrier for access to health care." He added that the bill strikes a "delicate balance" between offering too much or too little a subsidy (Fulton, CongressDaily, 3/14). Estimates on the cost of the new bill have not been determined, but last year's more "modest" CARE Act would have cost about $71 billion over 10 years, with about 9 million people using the tax credit (Sen. Frist Web site). By expanding eligibility through the new measure, an estimated 10 million to 17 million people "could take advantage" of the new tax credit. President Bush, who campaigned on providing tax credits for the uninsured to buy coverage, has "expressed support for the principles" of REACH, Frist said. Carper added, "It's important that his campaign pledge be turned into action here" (Fulton, CongressDaily, 3/14). Responding to the proposal, Chip Kahn, president of HIAA, a trade association representing the private health care system, said, "The administration and congressional members of both parties are to be commended for recognizing the need to help the uninsured, and we look forward to working with them in this important endeavor" (HIAA release, 3/14).