AMA backs tax penalty for uninsured

Vote seeks to affect those able to buy

June 14, 2006|By BRUCE JAPSEN | BRUCE JAPSEN,CHICAGO TRIBUNE

Hoping to prod an estimated 5 million uninsured Americans into buying health insurance, the American Medical Association backed yesterday a tax penalty for individuals and families who make enough to buy medical coverage but choose not to.

The AMA's policymaking House of Delegates vote in favor of what it called "individual responsibility" comes as state and federal lawmakers are weighing similar ideas in the form of legislation in Congress and statehouses across the country.

In the past, the Republican-leaning AMA has shied from government mandates as a way to provide health insurance coverage for more Americans. In this instance, the group acknowledged at a press briefing yesterday that its support of tax penalties to motivate people to buy coverage would be a "significant shift" in the organization's thinking on matters of covering the uninsured.

The vote, at the group's meeting this week in Chicago, means that the AMA will put its lobbying influence behind state and federal initiatives that advocate a tax penalty for uninsured individuals making $49,000 or more a year, or for families of four who make $100,000 or more if they do not buy medical coverage.

Under the AMA plan, individuals and families earning greater than 500 percent of the federal poverty level "would be required to obtain a minimum of catastrophic health care" coverage. The AMA would not specify the amount or specific kind of plan people should buy.

It's the latest of a growing number of legislative and political proposals that would require people to have coverage.

In Massachusetts, Gov. Mitt Romney signed legislation two months ago that made his state the first to require residents to have health insurance, just as drivers must have auto insurance.

Although Romney's proposal is financed via hundreds of millions of dollars in assessments on insurers, by penalties paid by employers and by state Medicaid funds, the AMA's proposal is devoid of details. AMA officials did not offer a specific amount of tax penalties that would be levied against the uninsured.

"This is our policy that would be used at the federal level to get uninsured people covered," said Dr. Ardis Hoven, a member of the AMA's board of trustees and a infectious disease specialist from Lexington, Ky. "I'd like to think of this as the carrot."

But the stick of the plan would most likely be smacked over those making a living wage - many of them younger people and families. Hoven and AMA officials said "young, relatively healthy individuals" account for 11 percent, or about 5 million, of the nation's more than 45 million uninsured Americans.

Passage of the measure was not without opposition from doctors at the meeting and from critics of such proposals in Washington. On a voice vote, AMA officials said it passed by a "large majority" of its 544-member House of Delegates. A specific vote count was not taken.

Critics of the AMA's move say the doctors are merely worried about their own bottom lines.

"The AMA has a long history of sacrificing consumer freedom when physician incomes are threatened and they are doing that with this tax increase," said Michael Cannon, director of health policy studies for the libertarian Cato Institute in Washington.

"They are trying to crack down on nurse practitioners because they don't like competition, and I have not heard of any resolutions they have offered to make the health care system more competitive, like opening your office longer or lowering your prices. These would be consumer-friendly responses to competition."

Bruce Japsen writes for the Chicago Tribune.

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