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Study Shows Tax Credits Can Help Provide Health Insurance to All Americans

July 25, 2002

ACP-ASIM Says Tax Credits Will Work as Part of Comprehensive Plan

(Washington, DC): A new study by the Center for Study Health System Change (CSHSC) shows that providing tax credits to buy health insurance can significantly help the uninsured-but would work best if included as part of an overall plan to make health coverage more affordable, according to the American College of Physicians - American Society of Internal Medicine (ACP-ASIM).

"This study provides additional data to support the workability of ACP-ASIM's seven year plan to expand access to affordable health insurance to all Americans," said Sara Walker, MD, MACP, president of the ACP-ASIM. "According to the study's data, tax credits would help 90 percent of younger, working Americans. But tax credits, in the absence of other comprehensive reforms to make coverage affordable, would still leave the sickest and the poorest uninsured."

"Not everyone will be helped by tax credits alone, which is why ACP-ASIM has proposed a comprehensive approach to the uninsured," said Dr Walker. "One third of the uninsured have incomes below 100 percent of the Federal Poverty Level (FPL). This study clearly shows what common sense dictates: families living hand-to-mouth can not afford to pay any form of monthly health insurance premium."

To help low-income American, ACP-ASIM has proposed nationwide income eligibility for Medicaid (up to 100 percent of the FPL) and converting State Children's Health Insurance Program (S-CHIP) to a federal-state entitlement program. A premium subsidy program for individuals with incomes above 100 percent of the FPL could be applied toward S-CHIP "buy ins" or toward the purchase of individual or employer coverage.

To assure that the program would benefit older and sicker patients, ACP-ASIM's proposal would require health plans to spread risk over large groups of consumers (called modified community rating), rather than on the health risk of the individual being insured. The proposal would also guarantee a right to renew coverage.

"The CHSCH analysis demonstrates that tax credits are of limited effectiveness as a 'stand alone' reform," noted Dr. Walker. The ACP-ASIM proposal would combine reform of the individual insurance market and expansion of public programs for the poor and near-poor. In this setting, tax credits for the purchase of individual insurance can be one key component of an effective strategy to provide affordable coverage for all Americans."

The American College of Physicians-American Society of Internal Medicine is the second largest physician group. Membership encompasses more than 115,000 internal medicine physicians and medical students.

Contact:
Jack Pope, (202) 261-4556, jpope@acponline.org
Jennifer Whalen, (202) 261-4575, jennw@acponline.org

Page updated: 11-03-03

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