Tax credit plan would offer funds for health insurance

The bill would help cover the uninsured but would bypass state-mandated patient protections.

By Joel B. Finkelstein, AMNews staff. March 3, 2003.

Washington -- What's old is new again. The first tax credit proposal of the season revisits old territory with new promises to help the uninsured.

The bill, called the Fair Care for the Uninsured Act of 2003, would offer tax credits for families who cannot get health insurance, either through employer or public programs. The credits would be advanceable, so people could get them before tax time, and refundable, for people who don't pay enough tax to cover the entire credit.

But, critics say, users of the tax credit may find themselves buying coverage that is next to worthless.

Many Americans either cannot afford or don't have access to health insurance, said Rep. Mark Kennedy (R, Minn.), who introduced the bill last month. "This bill aims to help solve that problem by giving cash-strapped Americans a refundable tax credit to purchase insurance."

The measure, which is identical to bills introduced in the past two sessions of Congress, would change the tax code to make available as much as $1,000 for individuals and $3,000 for families to buy health insurance. The bill also encourages states to form high-risk pools and associations to form cafeteria plans through which people could buy coverage.

The consumer group U.S. Freedom Foundation came out in support of the legislation. "This bill won't eliminate all our 40 million uninsured, but neither can any other single proposal that can pass a closely divided Congress," said the foundation's president, John E. Stone.