NCPA - National Center for Policy Analysis

LEVELING THE PLAYING FIELD

January 24, 2007

President Bush used his State of the Union address to outline his plans for making private health insurance affordable for more Americans, with a new emphasis on reducing the ranks of the uninsured.

The President's proposal would:

  • Make employer-provided health insurance count as taxable income.
  • Create a standard tax deduction of $15,000 for families and $7,500 for individuals who buy health insurance, either through their employer or on their own.
  • Take an undetermined amount of federal funding for hospitals and give it to states to help subsidize health insurance for low-income people.

John Goodman, president of the National Center for Policy Analysis, praised the president's idea of a standard tax deduction for health insurance because it would redistribute tax benefits from the haves to the have-nots.

"It levels the playing field for people who buy health insurance on their own rather than through their employers," Goodman said.  "If you're buying insurance on your own, you have to earn more to pay for your health care.  That's not fair."

Though others have previously suggested eliminating this tax inequity, Goodman said the president's idea may have more political currency because the nation's 77 million aging baby boomers are approaching retirement.

"Many boomers will retire before 65 and will shop for individual insurance to get them to Medicare," he said.  "When they're out there on their own, without the tax break they've enjoyed through their past employer, they're going to suffer sticker shock."

Source: Bob Moos, "Experts laud health care emphasis, disagree on deduction," Dallas Morning News, January 24, 2007.

 

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