HEALTH CARE/Joan Retsinas

A Line Not Worth Joining

Two years ago, with bombastic fanfare, this administration launched the Health Coverage Tax Credit (part of the Trade Act of 2002). The president opened up a mini-spigot of help for a sliver of Americans. If you checked the correct boxes on the "eligibility criteria" sheet, if you filed all the forms with the correct offices, you could get help. Lining up at this new health-spigot, you could get 65% of your health insurance back as a tax credit. You could even get the money up-front.

Treasury Secretary John Snow called the Health Coverage Tax Credit "a bold step in the direction of affordable health care for all Americans." The Internal Revenue Service touted the HCTC (for every program, an acronym) as "groundbreaking." On paper the credit looked plausible.

The sliver of eligibles included people who had lost their jobs (and hence their health insurance) because their jobs went South, or East, or West -&endash; anywhere overseas. So if you fit into either a Trade Adjustment Assistance (TAA) or an Alternative Trade Adjustment Assistance (ATAA) slot, you were eligible. If you lost your job in the general recession, you didn't need to inquire: you weren't eligible.

Or you could line up at this spigot if you were a retiree older than age 55, not covered by Medicare, and receiving a pension that was paid for by the Pension Benefit Guarantee Corporation (PBGC).

Most people who have gotten pink slips, though, don't trace the fate of their company, parsing the distinction between "downsized" and "displaced." Nor do retirees generally know the financial legerdemain behind their pensions -&endash; most feel lucky to get the monthly checks.

So the IRS set up a web site, installed a toll free number, and sent out millions of information packets. States were charged with publicizing this "groundbreaking" credit.

According to government projections, 500,000 Americans (eligibles plus dependents) would find relief at this spigot. And the relief promised to be substantial: If you qualified, and if your health insurance plan qualified (another phone call to verify its status), the government would pay 65% of the premium.

Recently (Jan. 24) Robert Pear from the New York Times looked behind the fanfare. About 8,300 "eligibles" have signed up for the HCTC. Counting dependents, 25,000 Americans are getting relief at this spigot. In Maine -&endash; a state that has seen an exodus of manufacturing jobs -&endash; fewer than 200 people signed up. Only 29 Texans signed up.

The administration is blaming poor outreach and the inevitable start-up lag -&endash; promising that more administrative dollars, and more time, will alert more Americans to this "groundbreaking" bonanza.

Yet Pear found a commonsensical reason people are not signing up: They can't afford even the reduced premium. Insurance for a family might come to $10,000 a year. If you are "displaced," living off savings and part-time work, you probably can't afford 35% of that, or $3,500. So people have looked at this spigot, done their own cost-benefit calculations, and passed.

Our health insurance system consists of spigots: if you are employed, you line up at your workplace spigot; if you are over 65 or disabled, you line up at the Medicare spigot; if you are a low-income parent with children, you line up at your state's Medicaid/Children's Health Insurance spigot. The spigot-approach is our modus operandi (unlike countries with one spigot, national health insurance). This "bold" "groundbreaking" spigot, though, is virtually useless.

Indeed, a cynic wonders whether the people who signed up for this credit needed the relief. If low-to-moderate income people couldn't benefit from the HCTC, then who did? Could the people who benefited from the credit have been able to foot their entire premium without a government subsidy? Was the HCTC another way to bolster the incomes of the wealthy -&endash; yet another tax cut?

Joan Retsinas is a sociologist who writes about health care in Providence, R.I.

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