[Congressional Record Volume 146, Number 38 (Thursday, March 30, 2000)]
[Senate]
[Pages S1995-S1996]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SANTORUM (for himself and Mr. Kyl):
  S. 2337. 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 to establish State health insurance 
safety-net programs; to the Committee on Finance.


                  THE FAIR CARE FOR THE UNINSURED ACT

 Mr. SANTORUM. Mr. President, I rise to join my friend and 
colleague, Senator Jon Kyl of Arizona, in introducing the Fair Care for 
the Uninsured Act of 2000, legislation aimed at ensuring that all 
Americans, regardless of income, have a basic level of resources to 
purchase health insurance.
  As we all know, the growing ranks of uninsured Americans--currently 
44 million and increasing at a rate of 100,000 per month--remains a 
major national problem that must be addressed as Congress considers 
improvements to our healthcare delivery system. The uninsured are three 
times as likely not to receive needed medical care, at least twice as 
more likely to need hospitalization for avoidable conditions like 
pneumonia and diabetes, and four times more likely to rely on an 
emergency room or have no regular source of care than Americans who are 
privately insured.
  The Fair Care for the Uninsured Act represents a major step toward 
helping the uninsured obtain health coverage through the creation of a 
new tax credit for the purchase of private health insurance, a concept 
which enjoys bipartisan support.
  This legislation directly addresses one of the main barriers which 
now inhibits access to health insurance for millions of Americans: 
discrimination in the tax code. Most Americans obtain health insurance 
through their place of work, and for good reason: workers receive their 
employer's contribution toward health insurance completely free from 
federal taxation (including payroll taxes). This is effectively a $120 
billion per year federal subsidy for employer-provided health 
insurance. By contrast, individuals who purchase their own health 
insurance get virtually no tax relief. They must buy insurance with 
after-tax dollars, forcing many to earn twice as much income before 
taxes in order to purchase the same insurance. This hidden health tax 
penalty effectively punishes people who try to buy their insurance 
outside the workplace.
  The Fair Care for the Uninsured Act would remedy this situation by 
creating a parallel system for working families who do not have access 
to health insurance through the workplace. Specifically, this 
legislation creates a refundable tax credit of $1,000 per adult and up 
to $3,000 per family (indexed for inflation), for the purchase of 
private health insurance; would be available to individuals and 
families who don't have access to coverage through the workplace or a 
federal government program; enables individuals to use their credit to 
shop for a basic plan that best suits their needs which would be 
portable from job to job; and allows individuals to buy more generous 
coverage with after-tax dollars. And of course the states could 
supplement the credit.
  This legislation complements a bipartisan consensus which is emerging 
around this means for addressing the serious problem of uninsured 
Americans: Instead of creating new government entitlements to medical 
services, tax credits provide public financing to help uninsured 
Americans buy private health insurance. Representative Dick Armey has 
been a leader in this field for some time now, having introduced last 
year similar legislation in the House of Representatives. And just 
recently, Senators Jeffords and Breaux introduced their own version of 
health insurance tax credit proposal here in the Senate. I applaud 
their efforts for advancing this important public policy initiative.
  A tax credit for the purchase of insurance would make it possible for 
many more people to obtain insurance, thereby helping to lower the 
total cost of insurance. In reducing the amount of uncompensated care 
that is offset through cost shifting to private insurance plans, and in 
substantially increasing the insurance base, a health insurance tax 
credit will help relieve some of the spiraling costs of our health care 
delivery system. It would also encourage insurance companies to write 
policies geared to the size of the credit, thus offering more options 
and making it possible for low income families to obtain coverage 
without paying much more than the available credits.

[[Page S1996]]

  It is time that we reduced the tax bias against families who do not 
have access to coverage through their place of work or existing 
government programs, and to encourage the creation of an effective 
market for family-selected and family-owned plans, where Americans have 
more choice and control over their health care dollars. The Fair Care 
for the Uninsured Act would create tax fairness where currently none 
exists by requiring that all Americans receive the same tax 
encouragement to purchase health insurance, regardless of employment.
  It is my hope that my colleagues will join me in endorsing this 
approach to provide people who purchase health insurance on their own 
similar tax treatment as those who have access to insurance through 
their employer.
                                 ______