Tuesday, September 20, 2011

Health Care Provisions in GSP/TAA Legislation

Today the Senate will consider the Generalized System of Preferences bill (H.R. 2832), which will likely be used as a vehicle to extend Trade Adjustment Assistance (TAA) programs.  Included in the TAA programs is a health care tax credit provided to dislocated workers, and the amendment would modify the TAA tax credit in several respects.  The amendment would:

  • Set the credit amount at 72.5 percent of premiums.  The Trade Act of 2002 established a 65 percent premium credit, and the TAA extension included in the “stimulus” increased that credit to 80 percent of premiums, but only for two years (through February 2011).
  • Codify the temporary two-year expansions of tax credit eligibility included in the “stimulus.”  Those provisions were intended to synchronize eligibility for TAA tax credits with eligibility for COBRA continuation coverage, as many individuals receiving the TAA credit use it to subsidize COBRA coverage.
  • Sunset the entire TAA tax credit program on January 1, 2014.

Also of note in the TAA bill is a health care pay-for – specifically, reform of the Quality Improvement Organization (QIO) program within Medicare, significant portions of which were included in the President’s February budget.  Proposals would require QIO contracts to be determined on a geographic basis to maximize efficiency, extend QIO contracts from three to five years, align QIO contract terminations and payment methods with federal regulations, and eliminate conflicts of interest between QIOs’ activities on beneficiary protection and quality improvement.  These provisions have yet to receive a formal Congressional Budget Office score.