Advertising

The Seattle Times Company

NWjobs | NWautos | NWhomes | NWsource | Free Classifieds | seattletimes.com

Nation & World


Our network sites seattletimes.com | Advanced

Originally published Thursday, January 25, 2007 at 12:00 AM

E-mail E-mail article      Print Print      Share Share

Some win, some lose in Bush's health-care proposal

Economists are still sorting out the implications of the broad health-care proposals President Bush unveiled Tuesday, but already some clear...

The Washington Post

WASHINGTON — Economists are still sorting out the implications of the broad health-care proposals President Bush unveiled Tuesday, but already some clear winners and losers are emerging.

Families with generous employer-sponsored coverage would be worse off, while those who buy insurance on the individual market, or whose health plan costs less than $15,000 annually, would come out ahead.

Moreover, while Bush's plan would alter a historic imbalance in the tax code that favors generally better-off consumers who get insurance through their jobs, it could undermine coverage for some sicker, older people and erode the employer-sponsored system that provides coverage to more than half of all Americans.

Some experts questioned whether the plan would help hold down spiraling health-care costs or extend health coverage to some of the 47 million people in the United States who have none.

"It's not solving the uninsured problem and it's not solving the cost problem, so it's not really advancing what we need to have happen," said Karen Davis, president of the Commonwealth Fund, a nonprofit health-policy research organization. "What it does is favor individual insurance. ... The question is, should you try to undermine employer coverage? Employer coverage has lower administrative costs, and it covers everybody in a firm."

Bush would treat the contributions that employers make as taxable income, no longer exempting the money workers use to buy health insurance.

Instead, the president would create a new tax break for everyone who buys health insurance, regardless of where they get it. The government would allow each family to deduct $15,000 a year from its taxable income to offset the cost of their policy; individuals would be allowed to deduct $7,500.

Democrats on Capitol Hill have panned the plan.

"The president's proposals are an opportunity missed," said Sen. Edward Kennedy, D-Mass. "They will not improve access to good coverage and won't help working families afford the spiraling cost of health care."

Under the plan, which would take effect in 2009, winners would outnumber the losers — at least at first.

Families that spend less than $15,000 on their health coverage (either on their own or with an employer's contribution) would come out ahead, since the new deduction would apply to all of the money spent on premiums. Other winners include the 17 million people who buy health insurance on the individual market, who would for the first time enjoy a tax break on the money they use to pay health premiums.

On the losing side are consumers with more expensive policies, especially those financed by employers, who would have to pay taxes on the money used to pay premiums exceeding $15,000.

Advocates said the proposals would hold down costs. Critics fear the plan would prompt employers to drop coverage.

E-mail E-mail article      Print Print      Share Share

More Nation & World

UPDATE - 10:01 AM
Rebels tighten hold on Libya oil port

UPDATE - 09:29 AM
Reality leads US to temper its tough talk on Libya

UPDATE - 09:38 AM
2 Ark. injection wells may be closed amid quakes

Armed guards save Dutch couple from Somali pirates

Navy to release lewd video investigation findings

More Nation & World headlines...

advertising


Get home delivery today!

Video

Advertising

AP Video

Entertainment | Top Video | World | Offbeat Video | Sci-Tech

Marketplace

Advertising