Law gives some health providers a tax break

Doctors, pharmacists, dentists and others in the National Health Service Corps will no longer have to pay taxes on their scholarships and loan reimbursements thanks to a new federal law co-sponsored by U.S. Sen. Maria Cantwell.

The program, which has Washington state roots, helps medical professionals who agree to work for two years in poor rural and urban areas. It gives community clinics in those areas the ability to compete financially for doctors by offering to help repay their school loans.

The corps was created in 1970 by U.S. Sen. Warren Magnuson of Washington.

The IRS started taxing the grants in 1986. Congress turned around and authorized the corps to help pay those taxes. The IRS taxed those payments, too.

So tax payments took up 40 percent of the program’s $124.4 million budget. Now the corps should be able to spend that money on its program, instead of on taxes, Cantwell said.

Cantwell, D-Wash., visited the Community Health Association of Spokane Clinic at 3919 N. Maple on Tuesday to celebrate the signing of the law. President Bush signed it Friday.

The CHAS clinic system, which serves Spokane County, has eight health care providers who came to the clinics because of the National Health Service Corps. They include doctors, midwives, pharmacists, a dentist and a dental hygienist.

During the past 12 months, those providers saw patients 14,403 times, said CHAS executive director Peg Hopkins.

With the grants now tax-exempt, the corps may be able to offer aid to 1,800 more medical professionals nationwide, Cantwell said.

Most of the providers stay on in the communities where they fulfill their obligation to the corps.

For example, the corps paid for two years of medical school for Dr. Jennifer Troiano. She did part of her service in a Spokane CHAS clinic and has completed her commitment.

She now works for Group Health Cooperative at Sacred Heart Medical Center. But she still works at a CHAS clinic one or two days a week where she learned how poverty and poor nutrition contribute to overall poor health.

“I believe in the mission of CHAS, which is to improve the health care of the greater Spokane community,” she said.