Thompson Details Bush’s Plan To Increase Number of Insured, Access to Care Through Tax Credits, More Community Clinics

The Bush administration on Jan. 30 outlined an "eclectic strategy" to help the nation's uninsured, the Washington Post reports. The plan includes refundable tax credits to help low-income Americans purchase health insurance, "new freedom" for state insurance programs and more money for community clinics and training programs that work to increase the number of health care workers in underserved areas. The tax credit plan will use $89 billion over 10 years to provide tax credits for workers who do not have employer-sponsored health coverage (Goldstein, Washington Post, 1/31). Under the proposal, families with annual incomes less than $25,000 would qualify for a $3,000 tax credit. Families with annual incomes between $25,000 and $60,000 would qualify for a smaller tax credit based on income. Individuals with annual incomes less than $15,000 would qualify for a $1,000 tax credit. Individuals with annual incomes between $15,000 and $30,000 would qualify for a smaller tax credit based on income. The proposal also would help states establish purchasing pools to reduce the cost of health insurance premiums for low-income residents who use the tax credits to purchase health coverage ( AP/Baltimore Sun, 1/31). According to HHS Secretary Tommy Thompson, who on Jan. 30 unveiled the proposal at a Washington, D.C., health center, the plan would provide health insurance for six million individuals over 10 years (Kemper, Los Angeles Times, 1/31). "In solving the problem of the uninsured, we must not be bound by the old ideological battles of the left and the right, of private-sector versus public-sector solutions. We must take the best of both worlds and in the end, the reward goes to those who need it most, the American families who lack access to quality health care," Thompson said (Washington Post, 1/31). Mark McClellan, a White House health policy adviser, added, "This is a very important topic with the administration. The problem of (access to) insurance is an enormous one" (Mulkern, Denver Post, 1/31). A kaisernetwork.org HealthCast of Thompson's press conference is available online.

Reaction
Some Republicans who support the proposal said that the plan would allow individuals to select health insurance plans "without establishing new government bureaucracies." The health insurance industry also "praised" the plan. "We are delighted," Health Insurance Association of America President Don Young said, adding, "The strength of the president's proposal is that it lets people look around for the best deal and be good shoppers" (Los Angeles Times, 1/31). Mary Grealy, president of the Healthcare Leadership Council, added, "The president's proposal takes an important first step toward helping many families obtain the health coverage they need" (HLC release, 1/30). However, some Democrats and consumer groups said that Bush's proposed tax credits "would be far too small to help most people" purchase health insurance, which they said costs more than $7,000 a year for a family of four. They also said that the plan may prompt a "movement away from employer-based insurance to an individual market," which "ultimately could make health insurance more expensive and harder to get for everyone." Rep. Pete Stark (D-Calif.) called the proposal a "terribly naive and poorly crafted idea. What they're doing is so marginal as to be next to useless." Ron Pollack, executive director of Families USA, added that the plan would only offer the uninsured a "10-foot rope to get out of a 40-foot hole" (Los Angeles Times, 1/31).

Other Components of the Plan
Other components of the administration's proposal are summarized below.

• Community Health Centers: Bush will propose $1.5 billion for community-based health centers -- a $114 million increase -- that would support 170 new and expanded facilities and provide services to one million additional patients ( HHS release, 1/30).
• Provider Training: Bush will propose $191.5 million, a $44 million increase, for a program that provides loans and scholarships to doctors and other health care professionals who are willing to work in underserved areas.
• Medical savings accounts: Bush will propose to "loosen the rules" to "make [MSAs] available through all employers," rather than only small businesses, and make the accounts, which Congress approved as an "experiment," permanent (Washington Post, 1/31).
• Federal CHIP funds: Bush will propose a plan to allow states to retain $3.2 billion in unspent federal CHIP funds that "otherwise would return to the federal treasury," which states could use to expand health coverage to the uninsured.
• Transitional Medicaid assistance: Bush will propose $350 million to extend a program that provides Medicaid coverage for families in transition from welfare to work (HHS release, 1/30).