WASHINGTON, Jan. 20 (UPI) -- President Bush used his State of the Union address Tuesday to repeat his call for tax credits to help provide health insurance to the 43 million uninsured Americans.
"On the critical issue of healthcare, our goal is to ensure that Americans can choose and afford private healthcare coverage that best fits their individual needs," Bush said in his speech. "To make insurance more affordable, Congress must act to address rapidly rising healthcare costs."
New poll results released in the past week show healthcare affordability is the top concern for many Americans. Bush's proposals included refundable tax credits, expansion of health savings accounts and association health plan legislation.
Bush's call for Congress to approve refundable tax credits of up to $1,000 for individuals and $3,000 for families to help low-income workers buy health insurance coverage is the same proposal he's pushed for the past two years. The credit for individuals would phase out at $30,000 for individuals and $60,000 for families.
A government analysis of the Bush proposal estimated tax credits would offer help to about 4 million to 5 million of the 43 million uninsured Americans.
Jack Meyer, of the Economic and Social Research Institute in Washington, said a critical element of the tax credit is if it is "sizeable enough for a family or individual to afford coverage, and second, do they have a place to take it where they can get coverage."
Sara Collins, senior program officer at the Commonwealth Fund in New York City, told United Press International a major criticism of the tax credit proposal has been that people using the credits could have difficulty purchasing private health plan coverage from the so-called individual or private market.
Individuals or families shopping for private plan coverage often find premiums are very high and, as Collins said, "People with pre-existing conditions may not be able to get a plan even with the tax credits."
Private plans also vary across geographic areas and may not include key carve-out areas, such as maternity benefits.
Most Democrats vying for their party's presidential nomination offer some type of refundable tax credits in their healthcare proposals and they generally include allowing people to use the money to buy into group plans.
Bush's earlier proposals said the tax credits could be used by some individuals if states created group purchasing pools, which at this point do not exist.
Maine is one state moving toward creating such a large risk pool but Meyer said most tax credit plans proposed by Democrats and others envision the credit coupled with funding increases for Medicaid and the State Children's Health Insurance Program to help create a safety net for the working poor.
"With no expansion of Medicaid, a lot of people in the lower incomes ... (it) won't get them where they need to go," he told UPI.
Health Savings Accounts are part of the new Medicare prescription drug law signed by Bush last year and estimates are up to 3 million people could take advantage of them by 2013. They allow people to put money, tax-free, into special, portable accounts that can be used to pay for medical expenses when combined with a low-cost, high-deductible basic health plan. The money can be used to pay for expenses incurred meeting the high deductible before the health coverage kicks in.
In his speech Tuesday, Bush proposed that people who buy catastrophic healthcare plans be allowed to deduct 100 percent of the premium from their taxes.
Meyer said health savings accounts have been more controversial but the tax credit would be a bigger deal. He said a properly designed tax credit could make a "major dent" in the ranks of the uninsured but added, "In contrast, I don't see health savings accounts as making a major dent."
Critics of health savings accounts -- formerly medical savings accounts -- contend they could dismantle the group coverage risk pool by pulling out young, healthy people who, instead of paying group health plan premiums, would pull out and create the health savings accounts. That would leave group plans with sicker and more costly members, raising the cost of those plans.
Some economists have said such accounts could simply turn out to be major tax shelters for the wealthy.
Jeff Lemieux of Centrists.org, which espouses middle-of-road politics rather than liberal or conservative extremes, said called the tax credits and the association health plan ideas the "same old, same old -- which really haven't captured people's imagination and haven't gone very far (in Congress)."
Legislation to allow industry association health plans, under the Employee Retirement Security and Income Act that covers union and large corporate health plans, to offer coverage to small business has been approved in the House and is pending in the Senate.
Associations for any type of industry could offer health plans to their small businesses, which could be of significant help since small businesses often cannot afford to offer workers health insurance because of the cost. Estimates put the number of people affected by this proposal at about 8 million.
Critics of association health plans have said such plans could raise rates for people who get sick, may not be required to pay claims promptly, might not allow appeals for claim denials and could be restrictive -- not offering coverage for such things as mammography.
