Untitled Document

Press Office

May 1999

McDermott & Rogan Introduce Working Uninsured Tax Equity Act

FOR IMMEDIATE RELEASE: MAY 14, 1999

McDERMOTT & ROGAN INTRODUCE WORKING UNINSURED TAX EQUITY ACT

Washington, DC -- Seeking tax fairness for the working uninsured, U.S. Rep. Jim McDermott (D-WA) and James Rogan (R-CA) today introduced legislation that would both reduce the number of Americans without health insurance and ensure that millions more do not get priced-out of the current health care marketplace.
"We do not claim that this bill is a complete answer to the problem of the uninsured," said McDermott. "But it is a reasonable, incremental step, that can be passed in this Congress with bipartisan support."

The bill introduced today would provide workers who do not have employer-sponsored health coverage the same tax preference now extended to those who get health insurance as part of their jobs.

McDermott said, "In most cases, the uninsured are working people whose employers don't provide health coverage and who cannot afford health insurance on the open market. Now is the time for Congress to begin addressing the problem of the uninsured."

Specifically, the McDermott-Rogan legislation will provide workers not offered employer-based coverage a partially refundable tax credit worth 30 percent of the cost of their health-insurance premiums. The tax credit would be limited to single workers earning less than $30,000 a year, and couples earning less than $50,000. Self-employed taxpayers would have the choice of their current tax deduction or the proposed credit.

Despite one of the longest sustained periods of economic expansion this century, the United States has not solved this key health-care problem: the growing numbers of people who have no health insurance. In fact, there are nearly 44 million Americans who don't have health coverage today.

The McDermott-Rogan proposal would target tax benefits to the neediest Americans. Working poor parents are twice as likely to be uninsured as their unemployed counterparts. As recently as 1997, 46 percent of poor parents who worked for 13 weeks or more during a calendar year were uninsured. But of those who had no earnings at all, only 23 percent were uninsured.

The measure also would be of particular benefit to minority groups. Among employed adults aged 18 to 64, 78 percent of whites have employer-based coverage, but only 64 percent of blacks and 53 percent of Hispanics.

Tax fairness for the purchase of health insurance benefits the growing corps of permatemps - workers who work full- or part-time as contract employees without being granted full benefit packages.

Last year, the General Accounting Office found that a similar plan would reduce the cost of health insurance to the working uninsured by nearly 30 percent. The GAO estimated that three-fourths of those without coverage would be eligible for the tax credit.

Other original cosponsors include Reps. Pete Stark, John Lewis, Lindsey Graham, Karen Thurman, Martin Frost, Jo Ann Emerson, Bob Matsui, Richard Neal, Ronnie Shows, Carolyn Kilpatrick, Jay Inslee, John McHugh, & Nancy Pelosi.