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Kerry's PAC Touts Health Insurance For All Kids

The ad is accurate. But it leaves out details on how Kerry would pay for his proposal, and what it might cost.

June 20, 2005

Modified: June 20, 2005

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Summary

 

A new TV ad released by Sen. John Kerry's PAC asks voters to support his child healthcare proposal, insuring "eleven million children in America" who currently lack coverage.

The ad fails to mention that the plan is quite expensive. One expert places the cost at $264 billion over 10 years, another at $700 billion. Also unmentioned is that Kerry proposes to pay for the plan by raising taxes, though he says only those making more than $300,000 a year would be affected. And buried in the bill is a potentially controversial proposal that would require middle- and upper-income parents to insure their children, or risk losing valuable tax exemptions worth hundreds or even thousands of dollars per year.

Analysis

 

Sen. Kerry’s political action committee, Keeping America’s Promise, released the 30-second ad "Nightmare" June 13. The groups says the ad will run in the districts of the House Commerce and Senate Finance committee leaders – Mississippi, Maine, and Pennsylvania – in addition to the home districts of House Majority leader Rep. Tom Delay and Senate Majority leader Bill Frist.

 

Kerry does not appear in the ad. However, he has made six speeches since April promoting the "Kids Come First Act of 2005," which he introduced on Jan. 24 with eight Democratic co-sponsors.

Keeping America's Promise Ad "Nightmare"

Announcer: Imagine having nowhere to turn for help when your child gets sick. Eleven million children in America have no health insurance. Their families face that nightmare everyday. We can change that.

The Kids First Act keeps America's promise, providing healthcare for America's kids. More than half a million Americans already support it. Shouldn't the politicians in Washington do the same? Tell Washington to put our kids first.

How Much?

The ad touts Kerry's bill as a way to end the "nightmare" families face when they have "nowhere to turn for help" if a child gets sick. We neither oppose nor endorse Kerry's proposal, but those who see the ad may wish to have additional information about the measure before passing their own judgment.

While it gives scant details on Kerry's bill, the ad is accurate as far as it goes. There were 10.8 million uninsured children in the US in 2003, according to US Census data, and Emory University health expert Ken Thorpe said Kerry's bill would cover practically all of them.

Not mentioned in the ad is the heavy cost – at least $264 billion over 10 years according to Thorpe, a former Clinton administration official. A higher estimate comes from Joe Antos, an economist at the Republican-leaning think tank American Enterprise Institute. He said his preliminary estimate of the total cost of Kerry's bill is around $700 billion.

Who Pays?

Kerry wrote in a June 2 editorial that he would pay for his plan through a tax increase -- by repealing the Bush tax cuts for those making over $300,000 a year. He called the decision "hardly a tough choice" that would not require "big tax hikes or new bureaucracy. "

Most of the revenue would go toward the federal takeover of Medicaid for children in poverty – currently split between state and federal funds – and provide more money for states that expand their State Children's Health Insurance Program (SCHIP) to include children of the working poor. In practice, states would agree to cover children in households up to 300 percent of poverty level – an income of $57,241 for a family of four in 2005. That change would insure approximately 8 million new children. And with expanded Medicaid access for two additional years through age 20, Prof. Thorpe estimates the entire program would cover between 10 and 11 million uninsured children.

Carrot and Stick

Also not mentioned in the ad is a potentially controversial provision that would require all parents except the lowest earners to buy health insurance for their children, or lose the child tax exemption on their annual income taxes. Except for those in the lowest income bracket – taxable income of less than $29,700 for a single parent and $59,400 a year for couples – parents would lose a $3,200 tax exemption for each child in 2005 if they didn't purchase insurance for their kids. That would amount to a tax increase of $800 per child for those in the next highest tax bracket and $1,120 per child for the most affluent families in the highest bracket.

The bill does provide a tax credit for some parents who buy insurance for children ages 19 and under. The credit only covers expenses beyond 5 percent of adjusted gross income each year, and it isn't clear how many families would be in a position to benefit. The credit is aimed at making sure no family pays more than a set portion of annual income on their children's health insurance.

  --by Jennifer L. Ernst

Sources

 

Kenneth E. Thorpe, "Federal Costs Associated with Kerry Health Care Proposal," Prepared for Office of Sen. John Kerry, 26 January 2005.

John Kerry, "Putting Kids First," Editorial, The Berkshire Eagle, 2 June 2005.

S.114, “Kids Come First Act of 2005,” 109th Congress, Introduced 24 January 2005.

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