President’s Bush’s State of the Union health care proposal couples an old idea, capping tax-free benefits for health care, with a new one: a standard deduction for all who buy health insurance.
If approved, and the plan faces a chilly reception in the Democrat-controlled Congress, the administration says it would give people who buy their own health insurance equal tax breaks with those who get coverage through their jobs. The tax savings could help 3 million to 5 million of the nearly 47 million now-uninsured people buy coverage, the administration says.
For the rest, the president proposes moving some money that currently goes to hospitals and nursing homes into subsidies to help lower-income people buy health insurance through state-sponsored insurance programs.
Opponents, such as liberal advocacy group Families USA, says the proposal mainly benefits wealthier Americans. Others say it could lead some employers to drop insurance, forcing workers onto the individual market, where some may not be able to afford coverage.
A similar plan to cap tax-free health benefits offered by employers was proposed by President Reagan in 1986 but failed to pass Congress.
Photo by Gannett News Service.
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