Tax credit proposals: skeptics doubt reforms will shrink the ranks of uninsured.(Practice Trends)

For the uninsured in America, the situation can be summed up as "same old/same old." It's the same old problem, and the same old solutions.

The ranks of the uninsured continue to swell--the latest Census Bureau figures show that nearly 44 million people were uninsured during all or part of 2003. President George W. Bush and likely Democratic presidential nominee Sen. John F. Kerry are each working hard to convince voters that they have the best ideas for solving the problem. Not to be outdone, a group of Senate Republicans, convened by Majority Leader Bill Frist (R-Tenn.) and chaired by Sen. Judd Gregg (R-N.H.) recently released its own set of proposals for reducing the ranks of uninsured people.

The three proposals have some common elements. For instance, the Senate Republicans' proposal and President Bush's proposal advocate the use of refundable tax credits to help low-income families purchase private health insurance. Both favor tax deductions for patients who buy their own catastrophic insurance policies to accompany a health savings account (HSA). And both support the use of as sociation health plans, which would allow employees of small businesses to band together to purchase group health insurance without having to comply with state benefit mandates.

Sen. Kerry's proposal contains some of the same elements. His includes refundable tax credits for up to 50% of the cost of coverage for both small businesses and their employees. But unlike those with the other plans, Sen. Kerry also focuses on larger groups--for example, he would allow both large and small businesses to buy into the Federal Employees Health Benefits Program, an option he says will make coverage more affordable for many employees.

He also would give large employers more incentives to offer coverage by reimbursing employers 75% of the catastrophic costs they incur above $50,000, as long as the money saved was used to offset employee premiums.

Costs of the reform plans also differ. Sen. Kerry says his plan would cost about $653 billion over 10 years and would provide coverage to almost 27 million previously uninsured Americans. The Senate Republican group says its plan would save $137 billion annually and insure an additional 17-25 million people. President Bush says three initiatives--offering association health plans, making insurance premiums deductible under HSAs, and giving tax credits to low-in-come people to buy health insurance--would insure an additional 6.1 million people and cost $95.3 billion over 10 years.

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