WASHINGTON – Maryland’s insurance commissioner warned Congress Wednesday that tax credits are not the panacea for the 43 million Americans who lack health insurance.
Steven B. Larsen did not take a position on tax credits, which have been suggested as a way to help uninsured people buy insurance on their own. But he told the House Ways and Means Committee Subcommittee on Health that the proposal should be examined carefully.
“Care should be taken to ensure that any solutions provide meaningful options to those we are trying to assist,” Larsen testified.
The insurance tax credit has yet to be proposed in Congress, but has been endorsed by President Bush and members of both political parties. Business leaders, healthcare experts and congressional aides who support the idea have been meeting monthly at the Wye River Conference Center on the Eastern Shore to discuss ways to promote it, according to the National Journal.
Larsen and others worry that credits will not be enough to help lower- income earners afford coverage, which is typically more expensive for an individual than for a company.
Supporters said it may not be perfect, but it’s the best of the viable options out there.
“A tax credit by itself is not a complete solution because not everyone will use it,” said David B. Kendall, senior fellow for health policy at the Progressive Policy Institute, a Washington-based progressive think tank. “But it is the only major tool for financing health care that is still in the toolbox.”
The Maryland Taxpayers Association also supports insurance tax credits, said president Kenneth Timmerman. “We do support the concept, and it should be pegged to income,” he said.
Larsen, however, urged Congress to look at some of the problems with the insurance tax credit.
He said consumers who buy their own insurance have to pay higher premiums — as much as twice as high, according to a recent study by the Kansas Insurance Commissioner — than those insured through a group plan at work.
And many people have a difficult time getting approved for health insurance individually, Larsen said. A 1999 survey by the Maryland Insurance Administration showed that CareFirst BlueCross BlueShield, the largest private insurer in Maryland, rejected 32 percent of the 18,000 people who applied for individual coverage in 1998.
It’s also difficult for the average consumer to shop for individual insurance plans, Larsen said.
“The marketplace is consumer-unfriendly,” he said. “That’s something Congress should give a lot of thought to.”
Vincent DeMarco, executive director of the Maryland Citizens’ Health Initiative Education Fund Inc., a coalition of organizations supporting universal healthcare in Maryland, couldn’t agree more.
“Tax credits are not the way to deal with the problem of the uninsured,” DeMarco said. He said that most people who lack insurance would need another $6,000 or $7,000 per year for coverage, and tax credits wouldn’t cover it.
DeMarco said more than 700,000 Marylanders, or about 13 percent of the population are uninsured. Outside of Medicare and Medicaid, the only plan offered by the state is the Substantial, Affordable, Available Coverage program, which helps some who have severe illnesses that prevent them from getting insurance.