Steady Progress

Washington remains ensnarled in debating whether the Senate will revisit prescription drugs, whether the House will address generic drugs and reimportation, and what kind of fireworks will explode when the Census Bureau releases its new uninsured numbers this Fall.

But nonetheless, the march of progress toward consumer-driven health care continues. The articles in this week's newsletter tell the story. The New York Times reports that refundable tax credits for health insurance are ?good news for workers who lose their jobs,? and offers examples of others who could benefit from them. This, from The New York Times, no less!

Next, an editor of Health Affairs provides detailed coverage of the evolving tax credit debate, explaining that expansion of public programs is ?at least temporarily moot? and that ?tax-based subsidies might be the only game in town for a while.? Legislative initiatives have evolved to address many of Democrats' concerns about tax credits, including Bush administration initiatives to make them advanceable, refundable, and non-reconcilable.

As a result of the trade bill enacted this summer, workers displaced by trade are eligible for a federal income tax credit of 65 percent of the cost of their health insurance. An estimated 140,000 displaced workers are expected to take advantage of this first round of credits, with further expansions likely under the leadership of Ways and Means Chairman Bill Thomas.

And finally, the Federal Employees Health Benefits Program is falling in line with other major employers by offering workers consumer-directed health plans. Starting next year, federal workers will have the option of health plans that offer personal care accounts of $1,000 for individuals and $2,000 for families. Workers choosing this option also will be covered by generous catastrophic coverage.

This new policy option is the direct result of the June 26 Internal Revenue Service ruling creating Health Reimbursement Arrangements that allow the personal care deposits to be rolled over tax free to the next year, providing an incentive for consumers to start asking questions about health care prices so they can spend their personal care account money wisely. Kudos once again to the IRS for this visionary ruling.

Federal workers also will have the option of setting aside tax-free dollars in a Flexible Spending Account. Maybe now there will be enough pressure to force Congress to change the law, end the use-it-or-lose-it provision, and allow rollover of unspent FSA money.

Ideas for consumer-driven health reform are making steady progress. Take heart!