PRESIDENT'S BUDGET EXPANDS ACCESS TO HEALTH CARE
New Health Credits, More Health Centers, State Purchasing Pools Would Assist Uninsured

"The President is proposing a comprehensive approach to improving access to health care, not a one-size-fits-all," Secretary Thompson said. "He is combining new tax provisions to support purchase of private health insurance with an affordable expansion of federal and state programs, and at the same time he is dramatically expanding the network of community health centers to provide medical care wherever it's needed."

The budget includes a number of key initiatives to help people who otherwise would lack access to health coverage and be unable to obtain needed care, including preventive care. Specifically:

• Health Credits - The Bush administration's budget proposes $89 billion in new health credits to make private health insurance more affordable for Americans who do not have employer-subsidized insurance. Eligible families with two or more children and incomes under $25,000 could receive up to $3,000 in credits to cover as much as 90 percent of the costs of purchasing health insurance. The credit phases out at $60,000 for families. Eligible individuals earning up to $15,000 annually would receive up to a $1,000 tax credit. For individuals, the credit phases out at $30,000. The credits are refundable, so their value does not depend on taxes owed. Beginning in July 2003, advance credits will be available allowing individuals to directly reduce their monthly premium payments. Starting in 2004, for certain individuals, states could provide the power of group purchasing for the health credits through state-sponsored purchasing pools, for example, through state employee purchasing pools or State Children's Health Insurance Program (SCHIP) purchasing pools for private insurance. The health credits could also be used in privately-sponsored health insurance purchasing groups. This proposal will provide coverage for up to 6 million Americans who would otherwise be uninsured for one or more months, and will help many more working lower-income families who currently purchase private health insurance with little or no government help.
  
  
• Community Health Centers - The budget includes $1.5 billion for community-based health centers, a $114 million increase that would continue the Bush administration's long-term strategy to add 1,200 new and expanded health center sites over five years and ultimately double the number of patients treated at them. The increase for fiscal year 2003 would support 170 new and expanded health centers and provide services to a million additional patients. About half the patients treated at health centers have no insurance coverage, and many others have inadequate coverage.
  
  
• Extended Availability of SCHIP Funds - The President's 2003 budget will strengthen the SCHIP by making available to states an estimated $3.2 billion in unused SCHIP funds that otherwise would return to the federal treasury. The SCHIP law originally required states that did not use their full SCHIP allotment during the previous three years to return the unused funds. These additional matching funds will enable all states to expand coverage to the uninsured.
  
  
• Extended Transitional Medical Assistance - The budget will provide $350 million to continue funding Medicaid for families in transition from welfare to work. This coverage helps to ensure that work pays for families by preventing them from losing their health coverage when they start jobs.
  
  
• National Health Service Corps - The budget will include $191.5 million -- a $44 million increase -- to strengthen the National Health Service Corps, which supports doctors, dentists and clinicians who serve in rural and inner-city areas that lack adequate access to care. With the increased funds, the National Health Service Corps will provide scholarships or loan assistance to about 1,800 professionals practicing in underserved areas - an increase of about 560 participants. Many will care for patients at community health centers.
  
  
• Health Accounts - The budget will also loosen the restrictions on Medical Savings Accounts (MSAs) and Flexible Spending Accounts (FSAs) to make the plans more attractive to individuals and employers, who otherwise might choose not to offer employee health insurance. MSAs give individuals greater control over their health care spending. Under the proposal, all employees and individuals who purchase a high-deductible health plan (up to $1,000 for individuals and $2,000 for all other cases) would be eligible to contribute to an MSA up to the amount of the deductible. The proposal would also make MSAs available to all employers, and they would be made permanent. Also, employees could roll over as much as $500 in unspent health care contributions to an FSA to use the following year or to contribute to a 401(k) plan.

"By making comprehensive health insurance more affordable, these health credits will help millions of families to buy the security that comes with private health insurance," Secretary Thompson said. "In addition, giving states the option of allowing residents to use their tax credits in conjunction with the power of group purchasing will enable states to expand access and provide a more comprehensive benefit package to moderate-income families that otherwise would be ineligible. These changes will help millions of uninsured Americans obtain health coverage."

Since taking office, President Bush and Secretary Thompson have worked to improve access to health care through innovative coverage programs in Medicaid and SCHIP programs. In August 2001, HHS launched the Health Insurance Flexibility and Accountability Initiative to make it simpler and easier for states to submit waiver requests and to have those requests promptly considered - and on Monday launched "Pharmacy Plus," a similar process to help states seeking to quickly expand access to prescription drug coverage for Medicare beneficiaries. Since January 2001, HHS has approved waivers and plan amendments that have expanded eligibility to about 1.8 million people and enhanced benefits for about 4.5 million people.

The administration also supports provisions in the House-passed economic security bill, which provide health credits to assist displaced workers as a temporary new unemployment benefit. This provision, which pays 60 percent of the cost of a health insurance plan for a year for workers eligible for unemployment insurance, would allow workers who have lost their job to keep their health care coverage through COBRA plans, mini-COBRA plans, and non-group health insurance.

As part of the President's community health center initiative, the fiscal year 2003 budget would continue to expand the safety net for those without good insurance. This will result in a total of more than 3,500 health center sites serving an estimated 12.8 million patients, including more than 5 million who have no health insurance at all.

For fiscal year 2002, HHS received a $165 million increase for the initiative, supporting 260 new and expanded centers and reaching an additional 1.25 million people. HHS' Health Resources and Services Administration (HRSA) today is announcing $14.6 million in grants for expanded services at 60 health centers as a result of that increased funding. More information on the 60 grants awarded today is available at http://www.hrsa.gov/.

Community health centers serve all people regardless of their ability to pay and target their services in areas where people face financial and social barriers to accessing high-quality care. Almost half serve rural communities. Many reach homeless people and migrant workers.

"The President has a strong, long-range commitment to expanding health services for those who need care," Secretary Thompson said. "The proposal for health centers in 2003 represents an increase of 25 percent over the level when the President took office -- the first part of a multi-year plan. And his proposed increase for the National Health Service Corps would be 30 percent in 2003 alone."

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