Administration News | Bush Rejects Caps on Worker Health Insurance Deductions Recommended by Tax Panel, To Make Health Care 'Centerpiece' of 2006 Domestic Agenda
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[March 7, 2006] The employer-sponsored health insurance system America has embraced for decades continues its decline. Although the current Bush Administration trend towards Health Saving's Accounts may be flawed in approach, it does rightly address health care inequities and the balance of power in the health insurance structure. Certainly a whole new health care model needs to be constructed. This will not happen, however, until health insurance companies are allowed to compete over state lines and the market truly opens up. Kudos to President Bush for having the guts to oppose his own Advisory Panel on Tax Reform.
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Kaisernetwork.org: Daily Health Policy Report


Administration News | Bush Rejects Caps on Worker Health Insurance Deductions Recommended by Tax Panel, To Make Health Care 'Centerpiece' of 2006 Domestic Agenda


[Jan 13, 2006] President Bush has decided not to support a plan recommended by the nine-member President's Advisory Panel on Federal Tax Reform that would cap income tax deductions for workers receiving employer-sponsored health insurance, according to Al Hubbard, director of the White House's National Economic Council, Bloomberg reports (Murray/Donmoyer, Bloomberg, 1/12). Under the current tax code, employers can take a deduction for health insurance provided to employees, and workers pay no tax on the value of the coverage.

Under the panel's recommendations, employees would have to pay income tax on employer-sponsored health insurance premiums higher than specified amounts Kaiser Daily Health Policy Report, (10/19/05). Hubbard said, "I know the president's not interested in pursuing that," adding that Bush would instead focus on expanding untaxed health savings accounts and greater deductibility of medical expenses. Proponents of the deduction say that failure to implement it would cost the federal government $6 billion to $28 billion in lost revenue. Karen Ignagni, president of America's Health Insurance Plans, said of the proposal's rejection, "That is very good news because the discussion in '06 should be about ways to expand, not contract coverage." Kaiser Family Foundation Vice President Larry Levitt said, "In the last few years, we have seen fewer employers offering coverage and fewer workers getting coverage through employment. Removing deductibility would have only exacerbated that trend" (Bloomberg, 1/12).


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