Bill Overview
Title: Bob von Schwedler Permanent Health Coverage Tax Credit Expansion Act
Description: This bill makes permanent the tax credit for the health insurance costs of eligible taxpayers and their family members. It also increases the credit percentage to 80% of such costs.
Sponsors: Rep. Kildee, Daniel T. [D-MI-5]
Target Audience
Population: People using or eligible for health insurance tax credits
Estimated Size: 51000000
- The bill expands health insurance tax credit to cover 80% of costs which benefits those who pay for their own health insurance.
- Eligible taxpayers and their families are the primary target, suggesting individuals who currently benefit from health coverage tax credits.
- Taxpayers who may become newly eligible due to the permanency of the credit are potential beneficiaries.
- The legislation makes the credit permanent, stabilizing insurance costs support for many Americans.
- Individual health insurance purchasers will be financially impacted positively due to reduced out of pocket expenses.
Reasoning
- The targeted individuals are those who pay high health insurance costs out of pocket, which tend to be persons not eligible for employer-provided healthcare and not qualifying for Medicaid. This generally includes early retirees, self-employed individuals, gig workers, and part-time workers.
- Given the distribution and the new cap, our interviews should include a mix of individuals who currently pay high out-of-pocket costs and those who are on the verge of affordability issues.
- It's important to note that the budgetary limit implies that while many are eligible, not everyone within the eligibility group will benefit immediately and equally. Interaction with existing state-level healthcare assistance programs could also vary impacts across different regions.
- Assuming a rough average baseline premium of $6000 per individual per year (with some variance), $85 Billion in year one could directly cover health insurance for 85/0.006=14.17 million individual plans. This aligns with members of the target group, spread across families.
- Considering that some very needy segments will have higher insurance costs and variable state contributions, we'll assume our sample has varying levels of improvement from no effect to transformative, with scalps between 0 and 10 for wellbeing changes.
- Demographic diversity in your interviews captures variance in health needs and costs, as well as perceptions of tax policy changes. We assume details align with the American populace data.
Simulated Interviews
Retired (Florida)
Age: 52 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- Currently, I pay a lot for my insurance, so reducing costs would really help my fixed retirement income.
- It's tough making it work with everything going up except for my pension.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 8 | 3 |
| Year 10 | 8 | 3 |
| Year 20 | 7 | 2 |
Freelancer (California)
Age: 33 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 14/20
Statement of Opinion:
- With my unpredictable income, it's hard to budget especially for insurance premiums.
- This policy could stabilize my financials a bit.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 6 | 4 |
Part-Time Worker (Texas)
Age: 45 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 20.0 years
Commonness: 8/20
Statement of Opinion:
- I struggle to provide insurance for my family, so something like this could alleviate a lot of stress.
- Health costs really eat into our savings and income.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 7 | 2 |
| Year 10 | 7 | 2 |
| Year 20 | 5 | 1 |
Small Business Owner (Ohio)
Age: 61 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 5/20
Statement of Opinion:
- Keeping up with health insurance for my family and employees is always a financial challenge.
- The credit could help free up funds for other necessary expenses for my business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Graduate Student (New York)
Age: 28 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- As I'm about to graduate, knowing there's a potential cushion for insurance costs adds peace of mind.
- Transitioning from education to workforce is daunting without support.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 5 |
Stay-at-Home Parent (Georgia)
Age: 39 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 12/20
Statement of Opinion:
- Health costs are one of the main reasons I can't think of getting back to work.
- I'd love to know we have better coverage at less cost, so I can focus on my family.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 6 | 3 |
| Year 20 | 5 | 3 |
Software Developer (Washington)
Age: 46 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 18/20
Statement of Opinion:
- I have decent coverage but it's very costly. Any relief is welcome so I can focus on saving for a house.
- Everything costs more now, so this policy could really help limit out-of-pocket expenses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 5 |
Caretaker (Illinois)
Age: 57 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 20.0 years
Commonness: 9/20
Statement of Opinion:
- Most of my income goes towards my parents’ care and insurance, leaving little left for savings.
- Knowing we would get more help for health costs would give peace of mind.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 5 | 2 |
| Year 3 | 6 | 2 |
| Year 5 | 6 | 2 |
| Year 10 | 6 | 1 |
| Year 20 | 5 | 1 |
Gig Worker (Arizona)
Age: 31 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 13/20
Statement of Opinion:
- It's hard to keep insurance when income is not guaranteed.
- If the policy works as expected, it might leave me more secure.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 6 | 4 |
Retired (Pennsylvania)
Age: 70 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 11/20
Statement of Opinion:
- Even with Medicare, my health expenses are high. Cutbacks will mean choosing what not to get.
- This policy could mean I no longer have to make those decisions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 3 |
Cost Estimates
Year 1: $85000000000 (Low: $75000000000, High: $95000000000)
Year 2: $86000000000 (Low: $76000000000, High: $96000000000)
Year 3: $87000000000 (Low: $77000000000, High: $97000000000)
Year 5: $89000000000 (Low: $79000000000, High: $99000000000)
Year 10: $93000000000 (Low: $82000000000, High: $103000000000)
Year 100: $120000000000 (Low: $110000000000, High: $130000000000)
Key Considerations
- The policy's permanent nature redirects ongoing federal revenues indefinitely without a plan for offsetting the cost.
- Extra governmental costs might be partially offset by reducing healthcare subsidies or raising other taxes, which could be politically challenging.
- Potentially increased health insurance enrollment could lead to less demand for public health programs, though this has not been quantified sufficiently.