Health care premium tax credits - Research Paper Example

Health Care Premium Tax Credits The Health Care Premium Tax Credit (HCTC) is a government program which helps ensure that health insurance is affordable for trade-affected workers, Pension Benefit Guaranty Corporation (PGBC) payees, and their families by covering 80% of their premiums (IRS “Individuals”). This program is set on a monthly basis and helps a person pay for health insurance annually whenever the federal tax return is filed. Upon registration for the monthly program, one is called on to pay 20% of the premium, the federal government would add 80% and then the program would send full 100% of the health care plan to the registrant (IRS “Individuals”).

It is a refundable tax credit and the refund is fully paid regardless of the income tax which is owed by the recipient (IRS “Individuals”). This HCTC benefits many displaced workers and those aged 55 years and older under pension benefit. It is meant to ensure that people can still access health care services despite their financial difficulties and economic status (IRS “Individuals”). The primary Act which has made the HCTC possible is the Trade Adjustment Act of 2002. This act basically created the HCTC and ensured that certain individuals who receive PBGC are qualified for credits (DSRA, p. 1). The act made it possible for 65% of health care insurance to be covered by the federal government.

Through this act, the HCTC has been implemented since December 2002; and it has also been available for all of 2003 and the years following (DSRA, p. 1). The American Relief and Recovery Act of 2009 (ARRA) extends the coverage of the Trade Adjustment Act of 2002. It is the act which provides about $30 billion for health investments with most of the investments made available to hospitals and physicians who use Electronic Health Records (EHR) (Cisco, p. 1). Those with EHR are qualified to receive incentives from the Medicare and Medicaid starting on 2011; the act includes a $2 billion grant from the Department of Health and Human Services and also grants for telemedicine projects (Cisco, p. 1). As part of the ARRA, the Trade Adjustment Assistance Health Coverage Improvement Act of 2009 was passed and this expanded the eligibility of qualified family members beyond the enrollees’ death or divorce for up to 24 months; also, those who are eligible but live in US territories can participate in the monthly HCTC (IRS “Individuals”).

The HCTC is included as a health policy because the Congress recognized that for people who lose their health coverage, the experience can be likened to losing their jobs or losing their pension. This was also included as a health policy in order to assist individuals who otherwise might not be insured (Fiser Group “Home”). It was included as a health policy as an innovative way of utilizing the taxpayer’s tax credit in order to assist those who are most vulnerable to the financial difficulties of the nation (Fiser Group “Home”).

The HCTC is a very useful and valuable program in health care. It is useful in the sense that it already uses the existing resources of the government and of the taxpayers in order to build a base for health care funding. The HCTC is also a valuable program because it helps to equalize the gap between the rich and the poor as far as health care access is concerned. The trend in health care before the introduction of this HCTC has been seen as favorable only to those who can afford insurance.

And these individuals can access quality health care services because of their comfortable economic station in life. For others who are not as financially secure, they have to suffer the consequences of having limited access to health care services when they are unemployed. The HCTC is a very encouraging addition to the health care program of the United States because it ensures that individuals can gain access to quality health care services regardless of their economic or employment status.

For the elderly citizens, it helps them secure long-term care even after they are retired. The topic is already included in the Patient Protection and Affordable Care Act. The Patient Protection Act offers tax credits to small businesses (less than 25 employees) having annual wages of less than $40,000 who purchase their health insurance through tax credits. The years 2010 to 2013, credits would cover up to 35% of employer’s contribution if the employer contributes at least 50% of the total premium cost.

Coverage will increase up to 50% by 2014 and after (Patient Protection Act, p. 4). And the general provisions of the Patient Protection Act is meant to benefit those who are uninsured, including those unemployed, and those who are 55 years and older under pension benefits. The topic is related to the legislation in the sense that it is meant to target those who cannot afford health insurance and hence are uninsured. The legislation already encompasses those who are originally covered by the Health Care Tax Credit.

The tax credit offered to small businesses however does not cover the unemployed and the seniors under pension; but the general provisions of the law encompass what the small businesses tax credit does not cover. The law is set to start implementation 6 months after enactment or on September 2010 with dependent coverage. The other provisions will be implemented starting 2010 to 2013; and the rest on 2014 onwards (Hildebrand “Business and Finance”). The item was included in the legislation because it matches or fits the general aims or goals of the Patient Protection Act.

If the Health Care Tax Credit would have been allowed to stand, there would have been an overlap in health care coverage. I believe that the inclusion of the health care tax credit in the new Patient Protection Act is a necessary and commendable move on the part of the government because, although it is a law which will likely cost the government millions of dollars in resources, the benefits which it will gain for the people and for United States in general are invaluable. These benefits would likely bring long-term benefits for those who cannot afford insurance and those who are vulnerable to the cost of health care.

Works CitedFAQ for Healthcare ARRA: HIT Stimulus. p. 1. 2009. Cisco Systems, Inc. 26 April 2010 from http://www.cisco.com/web/strategy/docs/healthcare/09CS2146_FAQ_ARRA_HIT_Stim_r1_052709.pdfHCTC Latest News, Overview and Background. Home. 21 April 2009. Fiser Group. 26 April 2010 from http://www.fisergroup.com/hctc_news.htmlHildebrand, D. Patient Protection and Affordable Care Act 2010. Business and Finance. 2010. Suite 101. 26 April 2010 from http://human-resources-management.suite101.

com/article.cfm/patient-protection-and-affordable-care-act-2010 How Health Care Reform Impacts Employers and EmployeesHealth Coverage Tax Credit. Individuals. 16 April 2010. Internal Revenue Services. 26 April 2010 from http://www.irs.gov/individuals/article/0,,id=109960,00.html Health Coverage Tax Credit (HCTC) FAQs. p. 1. (n.d). Delphi Salaried Retirees. 26 April 2010 from http://www.delphisalariedretirees.org/delphi/images/files/hctc_faq.pdfPatient Protection Act (with changes made by Reconciliation) Big I Brief Summary. p. 4.

22 March 2010. WJOB. 26 April 2010 from http://www.wjob1230.com/pageimages/PatientProtectionAct.pdf