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HIAA Defends Individual Health Tax Credit

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NU Online News Service, July 9, 5:10 p.m. — Washington

Individual health insurance is already far more affordable than critics charge, and it will become even more so if Congress enacts President Bush’s proposal to provide tax credits for the purchase of individual coverage, according to the president of the Health Insurance Association of America, Washington.

HIAA President Don Young argued here at a recent press briefing that supporters of government-sponsored health insurance are putting out misinformation about the cost of individual coverage and the likely effects of a tax credit.

Young said he expects Congress to consider the proposal sometime this month.

If Congress approves the proposal, the government would provide tax credits worth $1,000 per adult and $500 per child, up to a maximum credit of $3,000 per family credit, for taxpayers without employer-provided coverage who bought individual health insurance.

Today, millions of Americans can already afford individual health insurance, HIAA officials said.

An HIAA survey of 12 member companies that have issued more than 1 million individual policies showed that monthly premiums for individual health insurance now average $173 for single coverage and $334 for family coverage, according to Thomas Wildsmith, an HIAA policy research actuary.

The premiums vary according to age. For those under the age of 20, the average single premium is $82 per month and the average family premium is $143 per month, Wildsmith said.

For those between ages 60 and 64, the average single premium is $304 per month and the average family premium is $519 per month.

If President Bush’s tax credit proposal were enacted, the average monthly cost would drop to $89 for single coverage and $84 for family coverage, Wildsmith said.

For those in the age 60 to 64 category, the premiums would be $220 per month for single coverage and $269 per month for family coverage, according to HIAA projections.

Wildsmith added that many low income Americans are already buying individual health coverage, contradicting arguments that tax credits cannot work unless they cover the entire cost of the premiums.

Young acknowledged that the researchers who conducted the HIAA survey did not collect data on the nature of the individual policies purchased. The researchers did not ask, for example, whether the policies were comprehensive policies or “bare-bones” policies.

But Wildsmith suggested that a tax credit could help purchasers of individual coverage upgrade their policies, as well as helping the uninsured buy coverage.


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