With Increasing Support, Including AMA Backing, Tax Credits Seem Likely to Move Forward

Members of both political parties say that President Bush's plan to spent $71 billion over 10 years on refundable tax credits to help uninsured Americans has a "good chance of approval," the Sacramento Bee reports. The plan, called Fair Care for the Uninsured, would establish a refundable tax credit -- up to $1,000 for individuals, $3,000 for families -- that could be used to purchase private health insurance. Sens. Rick Santorum (R-Pa.) and Robert Torricelli (D-N.J.), sponsors of a similar Senate bill, say their plan would cost $15.8 billion in 2002, providing insurance access for 11.9 million employees and spouses, 5.7 million children and 1 million retirees. The senators added that, "with inflation," the proposal would cost $160.1 billion over 10 years. While Bush's proposal is about half that size, White House Budget Director Mitchell Daniels said that the White House would "negotiate the amount with Congress." However, many analysts say that individuals and families could purchase "little, if any," insurance with the amount proposed by Bush. According to a Kaiser Family Foundation survey, the average price of a health insurance policy for a family of four exceeds $6,300 per year. But Rep. Dick Armey (R-Texas), a sponsor of the House version of the plan, said that insurance companies would "drop their prices if a new group composed of millions of Americans became potential customers," adding, "Our plan would enable all Americans, regardless of income, to have access to health coverage, without new bureaucracy or costly mandates." Ron Pollack, executive director of Families USA, disagreed, maintaining that an employee tax credit would "give employers an excuse to drop benefits" and force employees to purchase coverage. "It is bad public policy to move away from an employer-based system," he said (O'Rourke, Sacramento Bee, 4/16).

AMA Backs Tax Credits
In addition to the "groundswell of congressional support," the American Medical Association also backs tax credits for the uninsured, AMA President Dr. Randolph Smoak said. The group has proposed a plan that would provide tax credits to allow the uninsured to purchase health coverage and offer "broad-based purchasing power" to organizations, churches and other not-for-profit groups, allowing them to purchase insurance for uninsured individuals (Bryant, Atlanta Business Journal, 4/16).