The Patients' Health Care Choice Act of 1999 (H.R. 1687), recently introduced by Rep. John Shadegg (R-Ariz.), includes a number of proposals designed to improve access to health insurance, say Heritage Foundation analysts.

The bill addresses the inequities created by the different tax treatment afforded employer-paid health benefits -- which are fully tax deductible for both employer and employee -- and health insurance purchased by the unemployed or individuals who work for small businesses -- who must pay with aftertax dollars.

Among Shadegg's proposals:

• ate a 100 percent refundable tax credit of up to $500 for individuals and $1,000 for families for the purchase of health coverage by workers whose employers make no contributions for individual or family coverage, and by the unemployed.

• Exempt legitimate "affinity groups" in existence for five years from state health mandates and allow them to offer health benefits packages to members, regardless of their state of residence.

• Expand access to medical savings accounts (MSAs) by repealing the artificial limit on their number and other restrictions, and allow all employers to offer them.

• Allow employers to offer tax-free vouchers for employees to purchase insurance at a HealthMart -- a clearinghouse where insurers would offer the same insurance policies and prices to all employers and employees, regardless of health.

The inequitable tax treatment of health insurance, say analysts, is the major reason most health insurance is purchased by employers. Shifting decision-making power to individuals would allow people to buy plans that meet their personal needs.

Source: James Frogue, "The Shadegg Health Bill: Expanding Access and Choice," Executive Memorandum No. 598, May 19, 1999, Heritage Foundation, 214 Massachusetts Avenue, N.E., Washington, D.C. 20002, (202) 546-4400.