FOR IMMEDIATE RELEASE
Monday, May 13, 2002CONTACT: Jennifer Laudano
Kati Anderson
(202) 628-3030
BUSH'S TAX CREDIT PROPOSAL WILL FAIL TO REACH UNINSURED AMERICANSNew report shows individual tax credits fall short of offering a real solution for the uninsured
WASHINGTON- As President Bush moves back to his domestic agenda he will once again focus on the centerpiece of his health care plan-tax credits for the uninsured. A new report released today by Families USA concludes that this approach would fail to expand coverage to low-wage workers.
The President's proposal would provide an annual $1,000 tax credit to low-income individuals for the purchase of health insurance in the individual private market. But, according to the report, the average annual premium for a standard health plan was $4,934 for a healthy, non-smoking 55-year-old woman, and $2,459 for a healthy, non-smoking 25-year-old woman.
The report found that even healthy consumers would find $1,000 health plans scarce in the private market. In fact, in 47 states, there were no $1,000 health plans available to healthy, non-smoking 55-year-old women.
- In the three states that did offer $1,000 health plans to a healthy, non-smoking 55-year-old woman, the annual deductibles were $5,000, and the coverage was very limited.
- Even for a healthy, non-smoking 25-year-old woman, 19 states did not offer $1,000 health plans.
When $1,000 health plans were available they provided inadequate health coverage. In the states with $1,000 health plans for 25-year-old women, they included high deductibles, high out-of-pocket costs, and limited coverage.
- Doctor's visits were not covered in 18 of the states.
- Maternity care was not covered in 28 states plus the District of Columbia.
- Prescription drugs were not covered in 19 states.
"The Bush proposal is an ineffective way to reach America's uninsured, low-income workers," said Ron Pollack, executive director of Families USA. "The assistance offered is far too little and leaves coverage unaffordable. It's like throwing a 10-foot rope to someone at the bottom of a 40-foot hole."
The report went on to look at the cost of an adequate or "standard" plan, which covers health care services comparable to the most popular plan for federal employees. The data showed that the cost of a standard health plan in the individual market-even after the $1,000 tax credit-were prohibitive to low-income workers.
- With the tax credit, a healthy, non-smoking 55-year-old woman living at the federal poverty level ($8,860) would still have to spend almost half of her annual income, 47 percent, before she would gain any health insurance benefit.
- Even a healthy, non-smoking 25-year-old living at the federal poverty level would have to spend 19 percent of her annual income before she would gain any health insurance benefit.
"This report illustrates the failure of individual tax credits, which will force low-income uninsured workers to choose between unaffordable health premiums or a Swiss-cheese type policy with more holes than cheese," Pollack said.
By looking at the options available to only healthy, non-smoking women, the data reflects the best-case scenarios in the individual market. According to the report, people with even the slightest health problems, such as allergies, would face even higher premiums and the possibility of being denied coverage.
The report is based on a 50-state survey focusing on healthy, non-smoking women ages 55 and 25. The report also examined the cost for a standard health plan, based on the most popular plan offered under the 2001 Federal Employees Health Benefits Program.
This report and state-by-state data are available on the Families USA website, http://www.familiesusa.org/.
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Families USA is the national organization for health care consumers. It is non-profit and non-partisan and advocates for high-quality, affordable health care for all Americans.
