Legislators pushing tax breaks for purchasing health care
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Legislators pushing tax breaks for purchasing health care

Date: April 5, 2007
By: Cliff Ainsworth
State Capitol Bureau
Links: HB 364

JEFFERSON CITY - As the season for mailing off tax returns approaches an end and with health care a central issue in Jefferson City, state lawmakers are pushing heavily for legislation that aims to give tax breaks to small businesses and Missourians for purchasing health insurance.

Even while legislators are sharply divided over eligibility standards for Medicaid programs that serve the poor, bi-partisan agreement has emerged on the issue of tax breaks to encourage purchasing private health insurance. 

Sponsored by Rep. Doug Ervin, R-Kearney, the proposal has drawn strong support from Democrats, who while critical of other tax relief measures and Republican health care initiatives, have signalled a willingness to accept the tax reductions as a positive step in expanding the availability of medical coverage.

The measure would allow individuals to deduct what they spend on health insurance from their state taxes if they cannot already claim the deduction on federal taxes.  The bill passed the House Thursday in a nearly unanimous vote of 156-0, with seven members absent.  

Although the tax breaks have been received positively by Democrats, they have tempered their praise with concerns over expanding Medicaid coverage.

Rep. Jeff Harris, D-Columbia, while voicing his approval of the individual deductions, said they were nonetheless a "small step on the margins" of helping people obtain medical insurance and called for a broader health care agenda.

"I think that's not a bad approach, although what we've yet to see from the governor is any sort of comprehensive approach that restores health care for the people whose health care he cut two years ago," Harris said.

In giving initial approval this week to a Medicaid overhaul bill, Senate Republicans defeated amendments that would have brought about 100,000 Missourians back on to the Medicaid rolls. 

Ervin said the deduction would especially benefit retirees who still get insurance through their former employer, people who buy their own coverage plans and some small business employees. 

"Anybody that is currently not able to take a federal deduction, this will give them some additional savings because they're doing the right thing and purchasing health insurance on their own," Ervin said, "and we just don't have anything out there that really rewards those people for doing the right thing."   The bill is expected to result in cuts between about $2.4 million and $11.2 million.

As the bill moves to the Senate, Sen. Joan Bray, D-St. Louis County, echoed Harris' sentiment while also asserting her support for the notion of health care-related tax breaks.

"We need to have a comprehensive, coherent approach to affordability and accessibility for health care," Bray said.  "We need to look at all the elements and figure out which ones are the best, that actually make health care more affordable and make health care more accessible."