| Health Care in the 109th Congress
John O'Neill, J.D.
Patricia Schoeni
Hank Kim, J.D.
A senior Senate Finance Committee staffer and a representative from the leading national health care coalition discussed health care-related issues that Congress may consider in 2005.
John O'Neill began by discussing the role of the Senate Finance Committee, where he works for the majority staff, and the key issues for Chairman Chuck Grassley (R-IA). He noted that the Finance Committee shares health care reform oversight with the Health, Education, Labor and Pensions Committee.
O'Neill said the Finance Committee could consider several health care-related issues in the coming months:
• refundable tax credits to purchase health insurance;
• an expansion of health savings accounts, including a tax credit to small businesses for HSAs;
• improved trade adjustment assistance, revising rules enacted in 2002, by providing a 65% tax credit to individuals displaced from their jobs because of overseas competition; and,
• changes to the tax treatment for long-term care coverage, designed to encourage the purchase of long-term care and to give tax credits to those who provide in-home care to family members.
O'Neill also said that Sen. Grassley would introduce a comprehensive health care reform bill later this year.
 Pat Schoeni said that the National Coalition on Health Care, of which NCPERS is a member, believes that proposals submitted by members of Congress and the Bush Administration to date are inadequate. Generally speaking, she suggested, most existing proposals fail to address the systemic health care system problems and would fail to adequately address the three problems with health care today: cost, access and quality.
The need for comprehensive health care reform, Schoeni urged, is apparent when you consider the projected increase in insurance premiums. The coalition believes that by 2006 an average family policy will cost more than $14,000 a year.
Concerning the many tax credit proposals introduced in Congress, Schoeni noted that two-thirds of those affected by tax credits already have health insurance. Therefore, such proposals would fail to expand coverage to those who find health care unaffordable, and would not help limit the increase in health care costs.
The importance of access to affordable health care is apparent when looking at the trends in this area. Today, 45 million Americans have no health care. Each year that figure is increasing by two million people—most of whom who are in the middle class.
The coalition, the nation's largest concerned with health care, has 95 members. They include pension organizations, religious organizations, consumer groups and health care providers. Following nearly a year of meetings the coalition reached consensus on a set of principles for health care reform.
 Lastly, Hank Kim, NCPERS Director of Governmental Relations & Counsel, presented two new NCPERS initiatives to alleviate some of the pressures felt by retirees and employees from the high costs of health care.
The first NCPERS initiative is the Healthcare Enhancement for Local Public Safety (HELPS) Retirees legislative proposal. The NCPERS HELPS Retirees bill would allow public safety retirees to use up to $5,000 of both their DB and/or DC pension benefits, on a pre-tax basis, to pay for health insurance premiums. NCPERS, along with the International Association of Fire Fighters and the Fraternal Order of Police, are in the midst of getting this bill introduced in Congress.
The second NCPERS initiative is the Creating a Retiree Medical Trust: How Employers and Employees can Use Pre-Tax Dollars to Fund Their Retirement publication. The Creating a Retiree Medical Trust paper discusses the benefits to employers and employees of establishing a retiree medical trust (RMT). When set up properly an RMT can provide a lifetime of retiree health benefits while limiting employers' financial exposure and avoiding GASB liabilities. This publication will be mailed out to all NCPERS members in early spring 2005.
John O'Neill serves as Tax and Pension Counsel to the U.S. Senate Committee on Finance, Majority Staff.
Pat Schoeni joined the Coalition after more than 20 years experience in public relations, government affairs, organizational development and management.
Hank Kim is NCPERS Director of Governmental Relations and Counsel.
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