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Health Care Law's Advocates Point to 'Tax Cut' on the Way

By Jane Norman, CQ HealthBeat Associate Editor

September 14, 2010 -- As Congress fights over whether to extend expiring Bush-era tax cuts, a group that has backed the health care law released a report on Tuesday that characterizes a health tax credit due to go into effect in 2014 as a "huge middle-income tax cut."

The report from Families USA said that the new refundable tax credits will go to an estimated 28.6 million Americans, with a total value for the tax credits in 2014 of $110 billion. Most recipients will be people with jobs, and many will be employed by small businesses, said the report.

"Right now there's ample conversation taking place in Washington about tax changes, so the report we are about to release is quite timely," said Ron Pollack, head of Families USA, in a briefing with reporters.

The health care law has not provided the bump in political support that Democrats wanted as they approach the midterm elections, and studies such as the one from Families USA give advocates a chance to shine a light on portions of the law that they believe are misunderstood or unknown.

At the same time, popular provisions due to go into effect on Sept. 23, including those clamping down on insurance industry abuses and expanding coverage, are in for a big shot of publicity in the next two weeks.

Pollack said the health tax credit report isn't tied to any specific developments in connection with the law or demands from Republican congressional candidates to "repeal and replace" it, but rather is part of a Families USA myth-busting roadshow that has toured across the country. Pollack said members of the group have found that misconceptions abound. "I remember one of the seniors asking a question about death panels, still," he said.

The lack of knowledge extends to provisions still far in the future. "I'm not sure that people even understand what an exchange is, today," said Pollack, referring to the health insurance marketplaces that will be established by 2014 to help consumers and small businesses purchase coverage. But as the law is explained, "I believe we're going to see, over time, support for health reform grow," he said.

The report, assembled by the Lewin Group for Families USA, says that people in working families with incomes at or above 200 percent of poverty level, or $44,100 for a family of four in 2010, will make up two-thirds of those eligible for the premium tax credit. Those on the lower end of the scale, though, will receive the largest credits, said Pollack. "This is one of the largest middle-income tax cuts in history," he said.

Rep. Pete Stark, D-Calif., chairman of the Health Subcommittee of the Ways and Means Committee, praised the findings in the context of the drive to roll back the health care law. "Congressional Republicans would repeal these tax credits — raising health care costs for working families and jeopardizing coverage for tens of millions of Americans," Stark said in a statement.

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