October 8, 1999

MITC Provisions Caught Up in Access and Patients' Bill of Rights Debates

Passage of the medical innovation tax credit (MITC) may be held hostage to procedural rules and controversial debates surrounding access to health care coverage and managed care regulation legislation. On Oct. 6 the House passed 227-205 "The Access to Quality Health Care Act," H.R. 2990, which includes a medical innovation tax credit for medical schools and teaching hospitals along with measures to increase access to health care coverage for the uninsured.

Introduced by the House Republican leadership on Sept. 30, H.R. 2990 would speed up the full health insurance deductibility for the self-employed, make health insurance and long-term care insurance fully deductible for those who pay half of the costs themselves, expand Medical Savings Accounts, allow employers to create Association Health Plans and Health Marts to pool together and improve purchasing power for employee coverage. The bill also includes a variation of MITC legislation, H.R. 1039/S. 1010. The MITC-related provision establishes an incremental 40 percent tax credit, in a new section 41 A of the Internal Revenue Code, for companies that conduct clinical testing research activities at U.S. medical schools and teaching hospitals. (H.R. 1039/S. 1010 calls for a 20 percent tax credit.)

The access bill is under a veto threat by President Clinton due to its lack of offsets. Moreover, House Democrats are criticizing the rule governing debate on the access bill and the managed care legislation. The rule requires that the House take up managed care legislation subsequent to passage of the access bill. Upon passage of managed care legislation, the access and managed care legislation would be immediately enrolled into one bill for a final vote. The controversial provisions in both bills make it unlikely that the joined together version would pass. The House is scheduled to finish debate on the managed care legislation and vote on the enrolled bill Oct. 7. As of press time, the debate had not been completed.

Information: Lynne L. Davis, AAMC Office of Governmental Relations, 202-828-0526.