WASHINGTON — Two Republican senators Monday proposed a family and child health care plan that would allow some families to deduct insurance costs on tax returns and require others to have private major medical coverage.
The plan was outlined by senators Phil Gramm of Texas and Paul Coverdell of Georgia one day before President Clinton outlines his proposals in his State of the Union message.
Under the plan health insurance would be fully deductible for families with children 18 and younger and with adjusted gross income below 300 percent of the federal poverty line — currently $46,800 for a family of four.
Families would receive a $500 tax credit for each child and families receiving the Earned Income Tax Credit — except those eligible for Medicaid — would be required to have major medical coverage through a private insurance policy.
All families covered by the plan would be allowed to establish tax-free medical savings accounts for health coverage and states would get extra flexibility on the use of Medicaid so they could focus on children’s health needs.
Gramm said the cost of the plan was still being worked out and expected it would be drafted into a bill in the next two weeks. He said the proposal represented a “consensus of the leadership as to items that ought to be considered” for inclusion in a package of tax and health legislation.
Senate Democrats have introduced several proposals to guarantee health insurance to children up to the age of 18, which is their highest health care priority for the current session of Congress. They have recommended tax credits and vouchers as a way to provide coverage to the estimated 10 million uninsured U.S. children.