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Legislation would provide tax credits for Californians without health insurance

April 05, 2001|By Jessica Rocha, Special to this newspaper

WASHINGTON (MNS) — Legislation that would provide tax credits to those who do not receive health insurance through their jobs was unveiled Tuesday.

Supporters say the bill could help 6.8 million uninsured Californians buy their own insurance.

Some critics say the credit would not be sufficient to cover the cost even of insurance through a health maintenance organization.

A bipartisan group of legislators, including House Majority Leader Dick Armey, R-Texas, and Sen. Robert Torricelli, D-N.J., introduced the bill in both houses. The credit was outlined in President Bush's budget proposal.

"By making health care more affordable, we can start to reduce the number of working families who live in constant fear that an illness will devastate their financial resources," Torricelli said.

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The bill would provide up to $3,000 per family toward the purchase of health insurance.

Ron Pollack, executive director of Families USA, a national organization for health care consumers, said that low-income people would still be unable to afford their contribution.

"The vast majority (of the tax credit) is going to go to those with health insurance already," Pollack said. "Almost all hypothetical analyses will tell you that a tax credit is not likely to result in current uninsured people getting new coverage."

According to the Kaiser Family Foundation, the average price for a family to join an HMO in California in 2000 was $423 per month, or $5,076 per year. Under the proposed legislation, a family would still be responsible for $2,076 of the cost.

California has the fourth-highest uninsured rate in the country. In 1999, 22.4 percent of the state's population was uninsured, compared with the national average of 17.4 percent, according to a study by the UCLA Center for Health Policy Research.

Fifty-one percent of California's uninsured work full-time, the center reported.

"Two-thirds of the uninsured have family incomes so low that they are unlikely to be able to afford any substantial contribution toward the costs of health insurance premiums," the study, released in March, states. "To make health insurance affordable for them, an employer or the government will need to pay most, if not all, of the cost."

Walter Zelman, president of the California Association of Health Plans, which represents insurers, said a tax credit to individuals would discourage employers from offering health insurance. He said he supports a proposal that would provide the credit to employers.

In California, 60.6 percent of residents received health insurance through their employers in 1999, while 4.7 percent purchased it privately.

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