To amend the Internal Revenue Code of 1986 to allow a tax credit for charitable contributions to private, nonprofit charities providing health insurance premium assistance and drug co-payment assistance, thereby transitioning uninsured Americans into private insurance and transitioning Medicaid patients into private insurance, and for other purposes.

Summary: Health Insurance Tax Credit Assistance Act of 2007 - Amends the Internal Revenue Code to allow a tax credit for charitable contributions to tax-exempt charities which subsidize health insurance premiums and pharmacy co-payments of uninsured individuals or individuals who cannot otherwise afford health insurance or drug treatments.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Insurance Tax Credit 
Assistance Act of 2007''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Health care spending in the United States has grown 
        rapidly to a rate of approximately 10 percent a year.
            (2) According to the Congressional Budget Office, with the 
        cost of health care rising rapidly, spending for Medicare and 
        Medicaid is projected to grow even faster--in the range of 7 
        percent to 8 percent annually.
            (3) More and more Americans with health insurance coverage 
        are experiencing increases in out-of-pocket expenses for health 
        care.
            (4) The rising costs of healthcare is driving more citizens 
        to be uninsured or underinsured. According to the Bureau of the 
        Census, Department of Commerce, the number of Americans without 
        health insurance in 2005 increased by 800,000 to 46,600,000 
        from 45,800,000 in 2004.
            (5) Many of these uninsured, nonelderly adults face chronic 
        conditions.
            (6) The rising costs of healthcare are compounded for 
        Americans who suffer from a chronic disease that requires 
        expensive treatments. Some of these uninsured adults with 
        chronic conditions forgo needed medical care or prescription 
        drugs, due to the prohibitive costs.
            (7) Many families who have a loved one with an expensive 
        chronic condition often face a difficult dilemma: if they 
        receive public assistance through State Medicaid programs, they 
        must meet and maintain a certain income threshold and if they 
        leave public assistance for private insurance, they must then 
        be able to meet higher premiums, co-payments and drug costs.
            (8) Currently, nonprofit charitable organizations have 
        recognized a need to develop financial assistance programs for 
        patients with expensive chronic illnesses to access treatment 
        and therapies to lead productive and healthy lives.
            (9) These patient assistance organizations (PAOs) prevent 
        patients with expensive chronic illnesses and conditions from 
        depleting financial resources to qualify for public assistance 
        programs by subsidizing health insurance premiums; pharmacy and 
        treatment co-payments; and expense associated with Medicare.
            (10) The Federal Government should be looking for ways to 
        reduce the costs to public programs like Medicaid at the same 
        time transitioning beneficiaries into the private health 
        market. One way to do this is to create incentives for 
        beneficiaries and their families to enter the workforce, earn a 
        better living and ultimately, participate in the private health 
        insurance market.
            (11) A targeted tax credit is one way the Federal 
        Government could encourage citizens to donate to qualified 
        PAOs.
            (12) The benefits of a tax credit provides the Federal 
        Government with a greater savings than the cost of the tax 
        credits themselves by transitioning patients off public 
        programs such as Medicaid, lifting them out of poverty, and 
        enabling them to access health insurance coverage.
            (13) This tax credit also contributes to PAOs that can 
        cover the ``TrOOP'' or ``doughnut hole'' expenses that Medicare 
        part D does not cover for disabled and senior citizens.
            (14) This tax credit in the end fosters a tax policy that 
        addresses three major areas of public policy concern--
                    (A) uninsured and underinsured citizens;
                    (B) treatment for Medicare beneficiaries 
                (``doughnut hole''); and
                    (C) cost savings for Medicaid.

SEC. 3. CREDIT FOR CHARITABLE CONTRIBUTIONS TO CERTAIN PRIVATE 
              CHARITIES PROVIDING HEALTH INSURANCE PREMIUM ASSISTANCE 
              AND DRUG COPAYMENT ASSISTANCE TO THE UNINSURED AND 
              UNDERINSURED.

    (a) In General.--Subpart A of part IV of chapter 1 of the Internal 
Revenue Code of 1986 (relating to nonrefundable personal credits) is 
amended by inserting after section 25D the following new section:

``SEC. 25E. CREDIT FOR CONTRIBUTIONS TO THE CHRONICALLY ILL UNINSURED 
              AND UNDERINSURED.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to the qualified charitable contributions 
made by the taxpayer.
    ``(b) Limitation.--The amount allowed as a credit to the taxpayer 
under subsection (a) shall not exceed $1,000 ($2,000 in the case of a 
joint return).
    ``(c) Qualified Charitable Contribution.--For the purposes of this 
section, the term `qualified charitable contribution' means a 
charitable contribution (as defined in section 170(c)) made in cash to 
a qualified charity.
    ``(d) Qualified Charity.--For purposes of this section--
            ``(1) In general.--The term `qualified charity' means an 
        organization described in section 501(c)(3) and exempt from tax 
        under section 501(a)--
                    ``(A) which is certified by the Office of Inspector 
                General of the Department of Health and Human Services 
                as meeting the requirements of paragraph (2), and
                    ``(B) which is organized under the laws of a State 
                at the time the contribution is made and is exempt from 
                income taxation (if any) by such State.
            ``(2) Charity must work to assist chronically ill patients 
        with health insurance premium assistance and copayment 
        assistance.--An organization meets the requirements of this 
        paragraph only if the predominant activity of such organization 
        is the subsidizing of health insurance premiums and pharmacy 
        co-payments of individuals who are uninsured or cannot 
        otherwise afford health insurance or drug treatments.
    ``(e) Denial of Double Benefit.--No deduction shall be allowed 
under any other provision of this chapter for any contribution for 
which a deduction or credit is allowed under subsection (a).
    ``(f) Election to Not Take Credit.--No credit shall be allowed 
under subsection (a) for any contribution if the taxpayer elects to not 
have this section apply to such contribution.''.
    (b) Clerical Amendments.--The table of sections of such subpart is 
amended by inserting after the item relating to section 25D the 
following new item:

``Sec. 25E. Credit for contributions to the chronically ill uninsured 
                            and underinsured.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.