[Congressional Record Volume 157, Number 74 (Thursday, May 26, 2011)]
[Senate]
[Pages S3439-S3440]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROCKEFELLER (for himself, Ms. Stabenow, and Mr. Brown of 
        Ohio):
  S. 1117. A bill to amend section 35 of the Internal Revenue Code of 
1986 to improve the health coverage tax credit, and for other purposes; 
to the Committee on Finance.
  Mr. ROCKEFELLER. Mr. President, when Congress passed the Trade Act of 
2002, we made a promise to American workers that the potential loss of 
jobs due to trade policy will not equal the loss of health care 
coverage. The health coverage tax credit, HCTC, was designed to help 
American workers retain health insurance coverage when their jobs are 
displaced by outsourcing--and it has been a lifeline for these middle-
class families who simply cannot afford coverage on their own. In 2010, 
an Internal Revenue Service survey found that 90 percent of HCTC 
participants are very satisfied with the program.
  However, despite the high satisfaction rate among participants, far 
too many trade-displaced workers are not able to take advantage of this 
important program. Historically, fewer than 30,000 of the hundreds of 
thousands of potentially eligible individuals each year have 
participated in the HCTC. These hundreds of thousands of laid-off 
workers and retirees have been left uninsured because the program still 
has several barriers to enrollment, and despite the 65 percent subsidy 
provided by the program, the premiums are prohibitively high for some 
workers.
  I have heard from steel retirees and widows in my state about how 
unaffordable the TAA health care tax credit is. I have been very 
frustrated, just as I was when this bill passed, that we have not been 
able to make the credit as affordable and accessible as possible for 
people who need it the most--laid-off workers and retirees who have 
very limited income.
  The Government Accountability Office, GAO, and several consumer 
advocacy groups and research organizations have cited affordability as 
the primary reason for low participation in the HCTC program. The 
bottom line is that a 65 percent subsidy is simply not enough for many 
to afford the high cost of health insurance premiums. The American 
Recovery and Reinvestment Act of 2009, which reauthorized the Trade 
Adjustment Assistance Act, made several temporary changes to expand 
eligibility for and benefits of the HCTC program. These changes 
included an increase in the tax credit's subsidy rate from 65 percent 
to 80 percent of the health insurance premium, and expanded TAA 
eligibility to additional workers. The GAO released a report

[[Page S3440]]

last year on the credit and found that HCTC participation increased 
after these key Recovery Act changes took effect. As a result of the 
Recovery Act, many more people eligible for the program felt they could 
afford a qualified health plan and afford to pay their share of monthly 
premiums. However, 33 percent still could not afford their share of 
monthly premiums, even with the credit and these expanded provisions 
expired on February 13, 2011.
  As our economy continues its recovery, it is critical to build on 
this program to help more Americans secure health coverage. The TAA 
Health Coverage Improvement Act would extend the Recovery Act's 
temporary provisions, and it would also address the issues of 
affordability by increasing the subsidy amount from 65 percent to 95 
percent, retroactive to the date the Recovery Act expired.
  This legislation also addresses the issue of affordability by placing 
limits on the use of the individual market, as Congress intended under 
the original law. The Trade Act of 2002 specified that the health 
insurance credit could not be used for the purchase of health insurance 
coverage in the individual market except for HCTC-eligible workers who 
previously had a private, non-group coverage policy 30 days prior to 
separation from employment. However, states have been allowed by prior 
Administrations to create state-based coverage options in the 
individual market for any HCTC beneficiaries, including those who did 
not have individual market coverage one month prior to separation from 
employment. As a result, there are people who had employer-based 
coverage prior to separation from employment who are now being covered 
in the individual market. This was not the intent of the law. To make 
matters worse, this interpretation undermines the consumer protections 
set forth in the law because individual market plans are allowed to 
vary premiums based on age and medical status. In one state GAO 
reviewed for its report, because of medical underwriting, HCTC 
recipients in less-than-perfect health were charged almost six times 
the premiums charged to recipients rated in the healthiest category. 
The legislation I am introducing today addresses this problem by 
clarifying that states can only designate individual market coverage 
within guidelines of 30-day restriction and by requiring individual 
market plans to be community-rated.
  Second, this legislation guarantees that eligible workers will have 
access to comprehensive group health coverage. Group coverage is what 
people know. The vast majority of laid-off workers and PBGC retirees 
had employer-sponsored group coverage prior to losing their jobs or 
pension benefits. The TAA Health Coverage Improvement Act designates 
the Federal Employees Health Benefit Plan, FEHBP, as a qualified group 
option in every State, so that displaced workers nationwide will have 
access to the same type of affordable, comprehensive coverage they were 
used to when they were employed.
  Third, the TAA Health Coverage Act clarifies the three month 
continuous coverage requirement. Under the original TAA statute, 
displaced workers are required to maintain three months of continuous 
health insurance coverage in order to qualify for certain consumer 
protections. Those protections are guaranteed issue, no preexisting 
condition exclusion, comparable premiums, and comparable benefits. 
Congress intended this three month period to be counted as the three 
months prior to separation from employment. However, the Administration 
has interpreted the three month requirement as three months of health 
insurance coverage prior to enrollment in the new health plan, which 
usually is after separation from employment and after certification of 
TAA eligibility. Many laid-off workers and PBGC recipients cannot 
afford to maintain health coverage in the months between losing their 
jobs and TAA certification and, therefore, lose eligibility for the 
statutorily-provided consumer protections. This legislation corrects 
this problem by clarifying that three months of continuous coverage 
means three months prior to separation from employment.
  Fourth, this bill allows spouses and dependents to maintain 
eligibility for the health coverage tax credit if the worker or retiree 
becomes eligible for Medicare. Younger spouses and dependents of 
Medicare-eligible individuals have not been able to receive the subsidy 
because eligibility runs through the worker or retiree. This 
technicality is unfair to individuals who rely on health coverage 
through their spouses or parents.
  Finally, this legislation streamlines the HCTC enrollment process and 
makes it easier for trade-displaced workers to access health insurance 
coverage. According to GAO, two of the factors contributing to low 
participation include a complicated and fragmented enrollment process 
and the inability of workers to pay 100 percent of the premium during 
the 3 to 6 months they are waiting to enroll in advance payment. This 
legislation includes a presumptive eligibility provision that allows 
displaced workers to enroll in a qualified health plan and receive the 
HCTC immediately upon application to the Department of Labor for 
certification. There is also a provision which directs the Treasury 
Secretary to pay 100 percent of the cost of premiums directly to the 
health plans during the months TAA-eligible workers are waiting for 
advance payment to begin. This legislation allows workers to be 
eligible for the HCTC even if they are not receiving training, an 
important provision that was included in the Recovery Act. The current 
training requirement subjects families to a loss of health coverage 
when transportation, relocation, or childcare issues interfere with an 
individual's ability to participate in training.
  As a former Governor, I know how important Trade Adjustment 
Assistance is to individuals who have lost their jobs due to trade. In 
West Virginia, thousands of workers have lost their jobs as a result of 
trade policy. While adjusting to the loss of employment, these 
individuals still have to pay mortgages, put food on the table, and 
care for their families. Finding affordable health care adds a 
significant burden to their worries. The TAA health coverage tax credit 
is designed to help American workers retain health insurance coverage 
during this very difficult transition.
  Since 2002, the HCTC program has been a lifeline for tens of 
thousands of participants. But for many others who face barriers to 
participation, the HCTC program is not living up to its potential. The 
GAO has given us a very specific diagnosis of the problems, and the 
Recovery Act has shown us that the situation can improve for trade-
displaced workers. The TAA Health Coverage Improvement Act builds upon 
the Trade Act of 2002 and the lessons we have learned since in order to 
make the health coverage tax credit workable for eligible individuals 
and their families. I look forward to working with my colleagues to 
pass this important legislation.
                                 ______