Act Proposes More Choices For Health Care
Legislation has been introduced in Congress that would expand the number of health care choices available to individuals. The bill, known as the Patients' Health Care Choice of 2003 (H.R. 3423), has been introduced by Rep. John Shadegg, R-AZ. The proposed legislation calls for the creation of "HealthMarts" and individual membership associations (IMAs), the expansion of medical savings accounts (MSAs), a refundable tax credit for health insurance costs, and a tax exclusion for employees who elect not to participate in an employer-sponsored health care plan.
H.R. 3423 cites the need for major structural reforms in the American health care system so that a competitive system is created that's based on individual choice. It has been referred to the House Ways and Means, Energy and Commerce, and Education and the Workforce committees for further study.
Some of the proposed bill's provisions included:
- Amending of the Public Health Service Act (PHSA) to create HealthMarts. These entities would be operated by health insurance issuers to provide health care coverage to individuals through: indemnity insurance, a health maintenance organization HMO), a preferred provider organization (PPO), or other health care options - one of which would be a non-network option. Health-Marts would be required to offer coverage to all employers and eligible employees in a specific geographic area. HealthMarts would be deemed multiple employers welfare arrangements for purposes of the Employee Retirement Income Security Act (ERISA).
- Amending PHSA to establish individual membership associations (IMAs) that would operate under the direction of an association to provide health care coverage to all members of the IMA, as well as their dependents. An association would have to have been in existence for at least five years and formed and maintained for purposes other than obtaining insurance.
- Providing federal matching funds to states equal to 50% of the monies expended for use with a high-risk insurance pool, a reinsurance pool, or other risk-adjustment mechanism that subsidizes the purchase of private health insurance.
- Adding a new section to the Internal Revenue Code to provide a tax credit for amounts paid for individual health insurance. The credit would be $3,000 or $1,000 multiplied by the number of persons covered (whichever is lower). An income exclusion would also be added to the Tax Code for "compensating payments" made to employees who elect not to participate in an employer-sponsored health care plan. The exclusion, however, would not apply to employees who are covered under a spouse's employer-sponsored plan.
- Repealing existing limitations on the number of MSAs that can be offered under the Tax Code and permitting all employers to offer MSAs. Also permitting both employers and employees to contribute to MSAs and permitting them to be offered under Section 125 cafeteria plans.
