Opening Statement of the Hon. Bill Thomas, a Representative in Congress from the State of California,
and Chairman, Committee on Ways and Means

Hearing on Health Care Tax Credits to Decrease the Number of Uninsured

February 13, 2002

Good morning. I’d like to welcome our witnesses and guests to today’s hearing on how to make health insurance more affordable for displaced workers.

A million Americans have lost their jobs since September 11.
When people lose their jobs, they often lose their health insurance coverage too.  Now, nearly 40 million Americans are uninsured.  When the uninsured receive medical care but can’t pay for it, the costs are shifted to others.  Exacerbating the problem is that these same uninsured individuals tend to receive less preventive care and often resort to emergency rooms as the doctor of last resort.

Six weeks ago, the House passed legislation providing unemployed workers access to the health insurance of their choice.  If the Senate had acted, millions of unemployed, uninsured workers and their families would already be receiving a 60% refundable and advanceable tax credit to assist them in purchasing the health insurance that best fits their families’ needs.  We are still waiting for the Senate to act.

Three fundamental principles should govern our solution to this problem: availability, affordability, and consumer choice. The displaced worker tax credit meets all those goals. 

The tax credit is refundable – that means even people with little or no tax liability receive assistance to purchase private health insurance.  The tax credit is advanceable – that means assistance is provided when it is needed, and individuals don’t have to wait until the end of the year to get a refund check from the IRS.  And most importantly, we trust individuals to choose the health care that best fits their families' needs, whether they chose to stay with their former employer's plan or they opt for a new one.

The President’s budget reserves over $100 billion for two new health insurance tax credits:  credits for all lower and moderate income uninsured individuals and the displaced worker tax credits, which passed the House in December.

The displaced worker tax credit is a large umbrella: if you’ve lost your job, you’re eligible. It will cover all those who find themselves unemployed through no fault of their own, not just people who were lucky enough to have insurance while they still had a job. It helps everyone, but particularly those at the lowest income level. The broader uninsured tax credit, is specifically targeted at lower and moderate wage earners without insurance, because their jobs don't offer health care.  It recognizes the diversity of the uninsured, and allows them to purchase the health plan that is best for them. 

Passing the problem off to the states - already struggling with skyrocketing Medicaid costs - is not the answer.  Forty states are running budget deficits and six are not even in session this year.  The prospect that these states would magically expand Medicaid, a welfare program for the poor, to middle class individuals is a long-shot at best. 

Health insurance for the unemployed should be just one component of a comprehensive modern health care system that offers choice, independence and the ability to tailor care to your specific needs.   But the real answer is to restore our economy to full health, creating the jobs and paychecks that will get displaced workers back on their feet.

Before proceeding to our witnesses, I would ask the Ranking Member, the gentleman from New York, if he wishes to make an opening statement.