INTRODUCING THE FAIR CARE FOR THE UNINSURED ACT -- HON. RICHARD K. ARMEY (Extensions of Remarks - June 25, 1999)

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HON. RICHARD K. ARMEY OF TEXAS IN THE HOUSE OF REPRESENTATIVES FRIDAY, JUNE 25, 1999

Mr. ARMEY. Mr. Speaker, today, I am introducing the Fair Care for the Uninsured Act, a bill to give the nation's 44 million uninsured a refundable tax credit of $1,000 per adult and $3,000 per family for the purchase of private health insurance.

Right now, there are 44 million uninsured people. That number is growing by 100,000 a month. A decade from now, it could be 53 million, or 60 million if the economy softens.

Most of these people are young, healthy, working people. Many are employed in small businesses. Many don't have full-time positions. Indeed, one recent study estimates that in California, nearly 40 percent of Hispanics are uninsured--40 percent.

There's something wrong when the richest nation on earth, with the best health-care system in the world, the lowest poverty, and the highest employment, has a constantly growing percentage of its population going without medical-expense protection, either because it is unavailable, unaffordable, or undesirable.

Nowadays, the Democrats seem more eager to pile new mandates on health insurance than to help people who don't have any. In our haste to protect patients from HMO abuses--and we'll take up a bill on that subject in the House next month--we should never forget about what mandates and higher costs mean for the millions of Americans who don't even have the first patient protection, health insurance coverage.

It's both for those who lack coverage, and those who dislike their coverage, that I'm introducing this bill. I think we can offer better solutions for the uninsured, help end frustrations with HMOs, and preserve the high quality of American medicine, all at the same time. How is this possible? By shifting more choice and control to individual patients, so they can take more responsibility for their health care--and take their business elsewhere when dissatisfied.

It's no secret why people are frustrated with work-based coverage today, or why they're calling on Congress for relief. Virtually all of today's problems in health care can be traced back to one source, the lack of a consumer-driven market. And the main culprit behind that problem is the tax code.

Millions of Americans are innocent victims of what I call the Health Penalty Tax. They're actually punished for trying to buy their insurance on their own, outside the workplace. Just as the Marriage Penalty Tax punishes people for doing the right thing and getting married, the Health Penalty Tax punishes people for doing the right thing and buying their own health insurance. This tax falls hardest on low-income, part-time, and contract workers, and the unemployed. That's not fair. But we can remedy this injustice.

The bill I'm introducing today would create a refundable tax credit of $1,000 per adult, $500 per dependent, and a maximum of $3,000 per family, for the purchase of private health insurance. It would be available to people who don't get their coverage through the workplace or a federal government program. People could use their credit to shop for a basic plan that best suits their needs and is portable from job to job. If they want more generous coverage, they could buy it with after-tax dollars. And of course the states could supplement the credit.

Let's think about what this reform would do. For one thing, it would give 44 million uninsured Americans access to a modest level of private health coverage. It would give them access to insurance that's portable. And it would give them a real choice of plans. Best of all, it would give them the power to keep their doctor and fire their HMO, instead of the other way around.

We shouldn't stop there, of course. We should give consumers additional tools--I'm thinking of innovative ideas like medical savings accounts, healthmarts, association health plans, and medical-malpractice reform. We should also encourage state-based ``high-risk'' pools to act as charitable safety-nets for people who are too sick to insure at any price. In combination with the Fair Care credit, these market-oriented reforms would go far toward creating a true consumer-driven marketplace in the 21st century.

Some say we can't afford to restore tax fairness for the uninsured. I say we can't afford not to. If the wealthy CEO is going to receive government-subsidized health care, then so should the waitress earning the minimum wage. Period.

Tax fairness is a nonpartisan idea. Even my liberal colleague from California, Mr. Stark, agrees we should use the tax code to help the uninsured. In fact, just the other day he and I published a joint opinion piece in the Washington Post on this very topic. It appeared on page A41 of the Washington Post of Friday, June 18, 1999. I would like to take the liberty here of quoting that article in full.

``MEDICAL COVERAGE FOR ALL: THE ULTIMATE CONGRESSIONAL ODD COUPLE WEIGHS IN (By Dick Armey and Pete Stark)
``We may be the ultimate congressional odd couple. We seldom agree on anything. But on this we do agree: Congress should act now to help the 43 million Americans who have no health insurance.
``The ranks of the uninsured are growing by 100,000 a month. And this is happening during a time of strong economic growth, despite continuing congressional attempts to expand coverage. Imagine what will happen come the next economic downturn.
``For individuals being uninsured is a problem because too often it means health care forgone, small warning signs ignored and minor illnesses allowed to become costly crises. It's problem for families because unpaid medical bills are a leading cause of personal bankruptcy. And it's a problem for the nation because uncompensated care is an unfair burden on doctors, hospitals and taxpayers.
``Why is the problem growing? Because Americans are increasingly unable to get coverage through their jobs. With health premiums going up, employers are bearing a smaller share of those premiums, and the work force is becoming increasingly mobile, and part-time. More and more people find themselves working in places where coverage is either unavailable, unaffordable or undesirable (``one crummy HMO''). And when these workers try to buy insurance outside their jobs, they lose a generous tax break, making coverage that much less affordable.
``Indeed, today's tax code discriminates against not only insurance purchased outside the workplace but also lower-paid, part-time and small-business workers. The highly paid CEO gets a more lavish health-care tax break than the waitress earning the minimum wage.
``These problems cry out for remedy. And happily, a bipartisan remedy is available. We think Congress should create a new refundable tax credit to enable all Americans to buy decent health coverage.
``Properly designed, such a credit could bring about near-universal coverage without new mandates or bureaucracy. It would eliminate barriers the uninsured face in today's system, enabling them to shop for basic coverage that suites their individual needs and is portable from job to job.
``To be successful, the credit would need to be sufficiently generous to buy a decent policy; available to those who owe no tax liability; and, to prevent fraud, paid directly to insurers or other entities, not to individuals.
``Would the existence of such a credit prompt some employers and employees to drop workplace coverage? Unavoidably. But job-based coverage is already eroding. And the erosion can be minimized by making the credit less attractive than most company plans.
``To be sure, we don't want to end workplace coverage. We do want to permit a gradual transition to a world in which individuals are free to obtain the kind of insurance they want, regardless of where it's purchased.
``What amount is `sufficiently generous'? That's open to debate. But we note that $3,600 per family is roughly the amount the federal government spends on its own employees' families.
``Obviously this proposal would produce a revenue loss of tens of billions a year, risking a return to deficits. So how do we `pay' for it? Well, a portion of the surplus could be used. And we note that reducing the numbers of the uninsured would free billions in current federal cross-subsidy programs.
``Admittedly, a tax credit can't help people who are too sick to insure at any price. Although we differ, fairly strongly, about the best way to help such people, we agree a reasonable way can be found to do so, and we'll keep looking for it. (Rep. Stark would prefer to get insurers to take all customers at a common price, regardless of health status. Rep. Army would set up `high-risk pools' to subsidize sick people's coverage in the 22 states that haven't already done so.)
``Too often, when Congress turns to health issues, it ends up applying legislative Band-Aids. It's time to address underlying causes. The biggest health problem facing the country is the uninsured. The tax code can be used to help them. We urge a bipartisan consensus to do so.''

I urge my colleagues to cosponsor this legislation.
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