08.06.02

Cantwell proposes plan to attract doctorsto rural and underserved communities

Senator kicks off statewide health care tour in Spokane

SPOKANE, WA - U.S. Senator Maria Cantwell (D-WA) today proposed bipartisan legislation to attract doctors to rural and underserved communities by exempting National Health Service Corps loan repayment grants from taxation. Under current law, these grants are taxed. As a result, forty percent of the Corps' loan repayment funds go to the Internal Revenue Service. Partly because of this drain on Corps funds, from 1999-2001, the Corps turned away nearly 60 percent of applicants for loan repayment assistance in exchange for rural or underserved community service in Washington state.

Cantwell outlined her legislation at the Maple Street Clinic of the Community Health Association of Spokane (CHAS) where she kicked off her statewide health care tour of 17 counties. She was joined by Peg Hopkins, CHAS Executive Director, and Dr. Jennifer Troiano, a CHAS physician who participates in the National Health Service Corps.

"Good health care begins with good doctors," Cantwell said. "We can improve health care throughout our state and country by helping rural and underserved communities get the doctors they need."

The National Health Service Corps (NHSC), created by Senator Warren Magnuson in 1970, attracts doctors to rural and underserved communities by offering scholarships or loan repayment dollars. Since 1970, NHSC has placed over 22,000 health professionals, including 434 in Washington state. More than 70 percent stay in their jobs after fulfilling their Corps obligation and more than 80 percent stay in the community in which they were placed. Nationwide, 2,376 Corps program participants provide health care services to 3.6 million Americans. Washington state currently has 75 primary care clinicians participating in the NHSC program, including 44 through the National Health Service Corps loan repayment program.

Cantwell's bipartisan legislation ("The National Health Service Corps Loan Repayment Act of 2002, S. 2654") would expand access to the National Health Service Corps program by exempting loan repayments from taxation. Under the Corps' current loan repayment program, doctors who agree to work in rural and underserved communities for two years receive loan repayment assistance of up to $25,000 annually. However, under a 1986 IRS decision, these funds are subject to the federal income tax. While Congress approved an additional stipend pays these taxes in 1986, the stipend itself is also taxed.

By exempting loan repayment dollars from taxation, Cantwell's legislation frees all Corps funds for their intended purpose: to attract doctors to rural and underserved communities. Under Cantwell's plan, the National Health Service Corps could attract up to sixty-seven percent more doctors to rural areas and underserved communities through its loan repayment program.

"Two out of every five dollars intended to bring doctors to rural and underserved communities are going to tax collectors," Cantwell said. "This common-sense idea cleans up a crazy system by making sure our health care dollars are spent on health care, not taxes."

Washington state faces a crisis of access to health care. In 2000 - before the economic downturn - there were 780,000 uninsured people in Washington state, including 155,000 children. In Washington's thirty-four least populated counties there are more than 20 percent fewer doctors than in the five largest counties. And it's not just that there are fewer doctors; in rural areas, people must travel further to get access to care.

Cantwell's legislation is co-sponsored by 16 other Senators, including Senator Craig Thomas (R-WY), the Republican co-chair of the Senate Rural Health Caucus, and Charles Grassley (R-IA), the Ranking Republican Member on the Senate Finance Committee, which has jurisdiction over the legislation. A total of nine Democrats and seven Republicans are co-sponsors of Cantwell's legislation. Cantwell will work with the Senate Finance Committee to ensure that act is included in Medicare legislation expected to move through the Senate this fall.

Cantwell's legislation is endorsed by more than 25 organizations, including the Washington State Medical Association, American Medical Student Association, National Rural Health Association, and National Association of Community Health Centers.

Cantwell will visit 17 counties on health care issues in August, touring clinics and holding community meetings. Over the next two weeks, Cantwell will visit Spokane, Pend Oreille, Ferry, Okanogan, Lincoln, Adams, Lewis, Clark, Island, Asotin, Garfield, Columbia, Walla Walla, Mason, Grays Harbor, Pacific, and Wahkiakum counties.

Cantwell is a member of the Senate Rural Health Caucus.

Endorsements of National Health Service Corps Loan Repayment Act of 2002:

American Academy of Nurse Practitioners, American Academy of Pediatric Dentistry, American Academy of Physician Assistants, American Association of Colleges of Osteopathic Medicine, American Association of Colleges of Pharmacy, American Association for Dental Research, American College of Nurse-Midwives, American College of Nurse Practitioners, American College of Osteopathic Family Physicians, American Counseling Association, American Dental Association, American Dental Education Association, American Medical Student Association, American Optometric Association, American Organization of Nurse Executives, American Osteopathic Association, American Psychological Association, American Student Dental Association, Association of Academic Health Centers, Association of American Medical Colleges, Association of Clinicians for the Underserved, Association of Schools and Colleges of Optometry, National Association of Community Health Centers, National Association of Graduate-Professional Students, National Rural Health Association, and Washington State Medical Association.