Posted on 01/20/2007 8:18:47 AM PST by PtrainerNYC
WASHINGTON - President Bush will propose in his State of the Union address a tax break for people who buy their own health insurance and a limit on how much coverage individuals can receive tax free at work. ADVERTISEMENT
The proposal to be announced Tuesday offers a tax deduction to people who purchase coverage and urges those with generous plans to either embrace cheaper insurance or pay taxes on part of it, according to a Bush administration official familiar with the proposals.
If passed by Congress, the plan would be the first time that workers could get a tax break for buying their own insurance. At the same time, it would be the first time that some employer-provided health care benefits could be taxed.
Exactly where do free markets exist???? All markets are imperfect to one level or another, the more complex, the less free. I bet the insurance companies would love for everyone to buy their own insurance, then it would be their actuarials, government lobbyists, marketing shills, and MBA braintrust against each and every consumer. And if it were wide open, there'd be no explicit or implicit price collusion; none whatsoever...eyes rolling...
The markets are largely free as is. Competition does exist. The problem is the double digit % price increases, and of course that derives from defensive medicine because of malpractice lawsuits.
Those are not going to change. An incremental approach can work. Just attack the pre-ex issue by making all individuals part of a group, and group plans can't exclude pre-ex. Compensate the industry for their loss with a tax cut.
It's a very philosophically conservative tax cutting approach.
Can someone explain the difference between Democrats and Republicans again? Lately, I'm having a hard time differentiating between the two.
You'll always find people here who defend the Republicans, no matter what foolish things they do.
One has an R after the name, the other a D, that's about it, I believe both creatures are invertebrates.
Closing loopholes is not a tax increase if rates are reduced commensurately. Or if other taxes are cut so that it nets out.
That said, yes: I want to close your loophole. I would get pinched by it too. But it's good tax and health policy nothwithstanding.
Early retirees who take advantage of the HIPPA mandate which requires any company selling individual policies in a state to issue a policy notwithstanding pre-existing conditions, don't have the immediate threat to their life savings. Unfortunately, there's a specific time limit on the ability to do this, and many aren't aware of it. For those who are, and do, the issue's the cost of the individual policy rather than the availability.
COBRA until your COBRA runs out, then HIPPA it. You'll pay about twice the normal cost of an individual policy, but you'll be covered.
Yes, it will be a huge issue. The Democrats will say "We're going to give you free/government funded health care with no hassles. You just to the doctor when you want to. The system will take care of everything." This will appeal to a lot of people.
However, this will be rationed care with government gatekeepers hidden well out of site. The dems won't bother to point that out. Since a rationed federal system can coast for some years on the existing infrastructure, the real damage only becomes apparent downstream. That's the political difficulty we face.
Were you absent the day in Econ 101 when they taught there is no such thing as a FREE lunch?
Dear Owen,
"Group plans for employers cover everyone. Individual policies would be bought by those who choose to buy them."
This implies that you're looking for the group plans to subsidize the individual plans.
For a variety of reasons, this might be problematic. I'm not sure that it would fly in every state, that insurance commissioners would uniformly permit this. As well, insurance companies who did this would be at an extreme disadvantage in trying to be competitive in the group market, as their group plan rates would be driven higher compared to those who refused to subsidize individual plans through group plans.
But without the subsidization, individual plans would become death spirals. They would start out with sick folks and high premiums, and as folks were driven out of the plan due to cost, only the sickest would be left, thus driving up the premiums.
I agree, though, that the political party that at least appears to offer an acceptable plan will be a big winner.
I'm not sure, though, that many of the suggestions I see put forth really address the biggest underlying problems.
sitetest
I can hear the Unions screaming now. When you are paying $750-1500 per month for HI, how can that not be income? Since they shot down his attorney bill, may as well attack the other side.
Pray for W and Our Troops
You people who post articles, then start off with your own falsely negative spin make me sick.
The first sentence from the article states:
President Bush will propose in his State of the Union address a tax break for people who buy their own health insurance...
That's excellent news considering how many people in this country buy their own health insurance. Like millions of others, I qualify for absolutely zero tax breaks. I do not own a home. I do not have dependent children. I do not own a business, but work as a "contract" employee in the IT department of a large corporation.
If this passes, finally there will be a tax break that helps me and people who are in a similar situation.
tax employer provided health benefits - and you will see employees start to reduce their level of coverage to reduce their tax burden on it. that's what will happen.
OK - you want to get the employer out of the loop and take it fully private. fine, propose medical 401Ks. I contribute (pre-tax) to the fund, my employer matches a portion of my contribution (tax deductible), and I buy my own private plan with it.
but the idea that some new round of taxes on people who already have health coverage, is going to solve the problems we have with the system, is crazy. it sounds like something the Dems would propose - we'll tax the system to reform it.
we already have that - through deductibles and co-pays. I pay for the first $1200 of medical costs (including drugs), without getting a dime back.
your second point is right on - wage earners are already paying for medicaid to provide the underclass and illegals with health care, now we have to pay some new tax for our own coverage?
fine, then propose medical 401Ks. that's the way to get to where you want to go.
and what will happen here is - the boomerang effect will give us univerasl medicare. put a new box on everyone's monthly wage statement that shows a new tax on their employer provided health care, and they will throw up their hands and embrace a full government solution.
the idea that we can tax our way to health care reform, is insane.
correct - this is going to implode on us for 2008. Hillary will just offer universal medicare, and we'll be out there offering to tax employer provided health benefits.
I'm currently cruising through TurboTax after receiving the W2 for myself and my wife. My federal taxes are around $38,000 this year...and I'm not finished. My company went public and forced a dividend down the throat of every stockholder to buy down the stock price before splitting. That was equity I really didn't want drained. Now I have to wait for a 1099-DIV to continue doing my taxes.
It is even worse. The illegals are getting free medical care and we, the American workers are getting the shaft. This is just the beginning of the socialist agenda.
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