January 24, 2007

DEMOCRATS FOR INCOME INEQUALITY!:

Bush Revives Some Past Proposals and Offers a New Initiative on Health Insurance (ROBIN TONER and ROBERT PEAR, 1/24/07, NY Times)

Aside from energy, the major focus of Mr. Bush's domestic proposals was an effort to expand access to affordable health insurance, by creating a new tax benefit for those buying insurance on their own rather than through their employer. The new benefit would be part of a sweeping change in the tax code under which employer-provided health insurance, which is how more than half of Americans get their coverage, would be treated as taxable income. For decades, those benefits have been exempt from income and payroll taxes.

In effect, the president is proposing a new standard deduction for health insurance -- $15,000 for families and $7,500 for individuals. That would mean lower taxes for more than 100 million Americans with employer-provided coverage worth less than the standard deduction, Mr. Bush said. But it would raise taxes for about 30 million people with more expensive plans, unless they switched to less costly alternatives, White House officials said.

Mr. Bush said the tax proposal was an effort to "level the playing field" between Americans buying insurance on their own and those who get it through their employers. "For the millions of other Americans who have no health insurance at all, this deduction would help put a basic private health insurance plan within their reach," he said. "Changing the tax code is a vital and necessary step to making health care affordable for more Americans."

Democrats, labor unions and some consumer advocates said the proposal would shake the foundations of the nation's health insurance system, still largely built around the workplace.

Congressional Democrats described the plan as a middle-class tax increase that would penalize people with good health benefits. They praised the new focus on health care, but said the Bush proposal was more likely to yield partisan debate than a search for consensus.

"It's difficult to imagine a proposal like this making it through the House or the Senate," said a spokesman for Senator Harry Reid of Nevada, the Democratic leader.


In order for market mechanisms to lower the cost of health care you need to use government to re-create the market.

Posted by Orrin Judd at January 24, 2007 8:34 AM
Comments

And the right-leaning blogs, seeing that someone's taxes will go up, are automatically against it even if it makes a lot of sense and reduces the govt role in health care.

Posted by: AWW at January 24, 2007 9:58 AM

In effect, the president is proposing a new standard deduction for health insurance -- $15,000 for families and $7,500 for individuals. That would mean lower taxes for more than 100 million Americans with employer-provided coverage worth less than the standard deduction, Mr. Bush said. But it would raise taxes for about 30 million people with more expensive plans, unless they switched to less costly alternatives,

Like HSAs coupled with high-deductible insurance plans (courtesy of the 2003 Medicare reform).

Posted by: kevin whited at January 24, 2007 11:43 AM

In effect, the president is proposing a new standard deduction for health insurance -- $15,000 for families and $7,500 for individuals. That would mean lower taxes for more than 100 million Americans with employer-provided coverage worth less than the standard deduction, Mr. Bush said. But it would raise taxes for about 30 million people with more expensive plans, unless they switched to less costly alternatives,

Like HSAs coupled with high-deductible insurance plans (courtesy of the 2003 Medicare reform).

Posted by: kevin whited at January 24, 2007 11:44 AM

"Democrats, labor unions and some consumer advocates said the proposal would shake the foundations of the nation's health insurance system..." Reactionary.

Posted by: ic at January 24, 2007 6:31 PM
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