Last week, I promised to tell you more about the victory on tax credits for the uninsured. I know that this sounds like an issue only a policy wonk could love, but it really is important and marks a turning point in our battle for free-market ideas in health reform.
The Galen Institute and our valued colleagues in the Health Policy Consensus Group have been working together for nearly a decade – and separately for much longer than that – to educate policymakers and the public about the wisdom of this idea as key to establishing a properly functioning market for health insurance.
So President Bush signed legislation on Tuesday to provide tax credits to individuals to purchase health insurance. The credits apply to only workers who lose their jobs because of international trade. It’s a small but important step in the journey toward a consumer-directed health system.
The Trade Act of 2002 provides a tax credit for 65% of the cost of health insurance premiums. The coverage can be bought through COBRA or through state-sponsored insurance purchasing pools. The credit also can be used to continue to pay premiums for an individual health insurance policy as long as that policy was purchased at least one month prior to job loss.
Our colleagues at the Coalition for Affordable Health Coverage, led by John Desser, did heroic work in advancing tax credits and keeping a dangerous “guaranteed issue” provision out of the bill. This would have set a very bad precedent for future legislation, requiring health insurers to sell a policy to an individual even if they waited until they were sick to apply (and sending insurance premiums soaring).
The legislation also allows people to use the credits to buy into state-run high risk pools, which provide a much better option for those who have trouble buying insurance. The bill provides $100 million in “seed money” for the risk pools.
The Census Bureau will release in late September new numbers for 2001 that are likely to show an increase in the number of uninsured Americans as a result of the nation’s economic turmoil.
Supporters of tax credits for individually-purchased health insurance believe that expanding the newly-enacted tax credits to a broader population would be a wise policy and political move.
I’ve been invited, along with several other Consensus Group members, to participate in President Bush’s Economic Forum at Baylor University in Texas, on Tuesday. About 250 industry leaders, private citizens, and policy experts have been invited to attend the forum, which will include eight panel sessions on different topics, including health care. This is quite an honor. I’ll report back next week.
And don’t miss the item below about retail prescription drug prices that shows that much more goes into a drug price than the wholesale price. The ABC News television affiliate in Detroit did an investigative series showing that some pharmacies inflate the price of some generic drugs by as much as 4,000 percent!