Statements on Introduced Bills and Joint Resolutions

CONGRESSIONAL RECORD
SENATE
Oct. 5, 2004

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Ms. MURKOWSKI:

S. 2893. A bill to amend the Internal Revenue Code of 1986 to allow individuals a refundable credit against income tax for the purchase of private health insurance, and for other purposes; to the Committee on Finance.

Ms. MURKOWSKI. Mr. President, I believe all Americans should have access to affordable, high-quality health care. Rising health care costs impose a burden on families and small businesses and put coverage out of reach for many Americans. According to the most recent Census Bureau findings, 45 million Americans lack health insurance; about 200,000 of the 45 million were Alaskans. The vast majority, nearly 80 percent, of uninsured Alaskans in 2003-2004 were employed or members of working families.

As part of the effort to address this problem, I have introduced legislation that will increase the number of insured Americans. The SAVE (Securing Access, Value, and Equality) Health Care Act offers a solution to the problems of accessibility, portability, and choice.

My plan does not just increase funding for current government programs; my plan provides a path to greater opportunity, more freedom, and more control over your own health care and your own future.

The SAVE Health Care Act would provide working class Americans with a tax credit that they can use to purchase health insurance. The act targets three-quarters of the total number of uninsured Americans by setting eligibility at 350 percent of poverty, or an Alaskan's annual income of $41,000 for an individual or $82,000 for a family of four.

To help make health coverage more affordable for low and middle-income individuals and families who do not have employer-provided coverage and who are not eligible for the expanded public programs, this legislation would provide a refundable tax credit of up to $1,000 for individuals and up to $3,000 for families, which could be advanced on a monthly basis.

The SAVE Act would also cover an additional 50 percent of any health insurance premiums not covered by the basic credit. This provision is targeted to help those who need health insurance the most-those who are sick, have pre-existing health conditions, or older Americans whose insurance prices are higher and who do not have access to employer-based insurance.

A tax credit proposal without this type of additional assistance would only help insure the young and the healthy because their premiums are the lowest and most within reach financially. The additional credit is a key part of providing coverage to Americans with the greatest need.

The SAVE Act would allow those who have access to employer-sponsored plans to have up to one-half of the credit they are eligible for to help them pay for their portion of the health insurance premiums. This credit amount is a balance designed to help employees afford their portion of employer-sponsored coverage without providing employers an incentive to shift more costs to their employees.

The SAVE Act includes a provision that would make the premiums for qualified high-deductible health insurance plans that coordinate with Health Savings Accounts (HSAs) tax-deductible. Both individuals and their employers can contribute tax free dollars to an HSA, and the individual can use these dollars for qualifying out-of-pocket medical expenses.

The SAVE Act provides small business owners a refundable tax credit for contributions they make to their employees' HSAs in the amount of $500 per worker with family coverage and $200 per worker with individual coverage. More than half of the uninsured are small business employees and their families.

In addition to reducing the number of our nation's uninsured, this legislation will create an incentive for personal savings while shaping a health care marketplace driven by consumer choice.

The SAVE Act would extend and expand the State high risk pool health insurance grant program that was established under the Trade Adjustment Act of 2002. Alaska is one of 31 States that currently operates a high risk pool. I commend the work of the Alaska Comprehensive Health Insurance Association (ACHIA), the nonprofit organization that provides health insurance to 467 Alaska residents who would otherwise be denied coverage because of medical conditions. Under this legislation, Alaska will receive a portion of the $75 million allocated in this legislation to continue to operate our high risk pool and to continue insuring Alaskans that really need this program.

The SAVE Act would establish a grant program in which States would be encouraged to establish Voluntary Choice Cooperatives, or VCCs. VCCs essentially increase the clout of small businesses in negotiating with insurers. Premiums are generally higher for small businesses because they do not have as much purchasing power as large companies. This limits the ability of small businesses to bargain for lower rates. They also have higher administrative costs because they have fewer employees among whom to spread the fixed cost of a health benefits plan. Moreover, VCCs decrease the risk of adverse selection and spread the cost of health care over a broader group.

I believe this well-rounded approach will provide significant help with the cost and availability of health insurance, and make a real difference in reducing the number of uninsured Americans.