Bush's new health care tax incentive plan

caffeinebuzzchick · 02-24-2007, 02:51 PM

Bush spotlights rising health care costs - Yahoo! News

okay... i'm not sure what to think about this one... what do you think of the president changing tax laws to have a standard exemption for people who buy health care insurance?

"WASHINGTON - President Bush is not giving up on his call to overhaul the tax code for those who buy health insurance. The president focused his attention again on the topic after a recent government report projected that health care spending would double by the year 2016. Analysts say current tax policy is contributing to the increase in spending through incentives that favor more comprehensive and expensive health benefits.

The president noted that the current policy also discriminates against those who buy their insurance in the individual market. They don't get the same tax advantages as those who get insurance through their employers.
"When it comes to health care, everyone should get the same tax breaks," Bush said Saturday in his weekly radio address.

The president has proposed treating health insurance contributions as income, which would cause workers' taxable wages to shoot up dramatically. But the president then calls for a standard tax deduction for those who buy health insurance — $15,000 for family coverage and $7,500 for individual coverage."

Now, these are kind of my unfiltered thoughts... any background/corrections/perspective you can provide is appreciated.

At first blush, it seems to me that it's a "robbing peter to pay paul" situation... now you're punishing people who get health care benefits through their employers so that others can get a tax cut. Okay, admittedly, i get healthcare through my husband's employer, so I'm selfish.

However, I'm not the one who really gets the tax break on this. We pay about 10% of the total cost of the health care policy pre-tax. The employer pays for the rest of it... BUT the employer can write this off their corporate taxes. further, the employer realizes a savings off the cost because they're buying as a group, they're not buying "x" number of individual policies... they get a rate that they can negotiate with the insurance company depending on the group's size and claims experience. *i'm* not getting very much tax benefit off of it... i'm just basically getting cheap health care. If you went to buy a policy off the street, I would have to buy the whole thing, post tax, without being able to write off any part of it off my taxes.

what i don't get is... how is giving a huge tax break to people who buy policies on their own, AND taxing the cost of that employer-purchased health insruance policy as income. assuming my family policy is $1200/month, that's $14,400 a year that I'm adding to my taxable income! it's crazy!

in addition, this tax scheme won't help people who can't currently afford health insurance, because if they couldn't afford to buy health insurance before, they STILL will not be able to, even with a tax break. and it STILL doesn't address the issue of the cost and inefficiency of the insurance industry in general... i mean, why doesn't the government go find out the ROOT CAUSE of *why* insurance coverage is so costly to begin with? because it seems to me that a $600- $800/month individual health insurance policy (this seems to be pretty average from my experience, depending on the coverage) is a LOT of money if you don't go to the doctor much.

What do you think?

highway80west · 03-09-2007, 04:04 PM

I am not at all anxious to see how Gov. Arnold in California is going to implement health care for all. It may as well be a low premium with a stratospheric deductible (Like at $125/mo with a $5K deductible). That hurts than getting a shot.

That's what Aetna and PacifiCare has on their websites when one Googles for rates on health insurance.

tristanrobin · 03-09-2007, 04:10 PM

Quote:

"When it comes to health care, everyone should get the same tax breaks," Bush said Saturday in his weekly radio address.

so, does that mean he now supports abolishing the income tax on the health insurance paid into same sex couples' joint insurance policy?

at this point, the amount we PAY in insurance premiums on a partner's policy is TAXED as INCOME.

highway80west · 03-09-2007, 05:34 PM

I gained about $500.00 when I deducted my medical/dental expenses. That was a big help to me. I guess that's a little more insurance from a broad point of view.

tristanrobin · 03-09-2007, 05:43 PM

hi highway!

garysher · 03-09-2007, 05:46 PM

Quote:

Originally Posted by tristanrobin

so, does that mean he now supports abolishing the income tax on the health insurance paid into same sex couples' joint insurance policy?

at this point, the amount we PAY in insurance premiums on a partner's policy is TAXED as INCOME.

Trust you to turn a thread on healthcare into some imagined homosexual victimisation issue

saint · 03-09-2007, 06:55 PM

And How!

caffeinebuzzchick · 03-09-2007, 07:15 PM

Quote:

Originally Posted by tristanrobin

so, does that mean he now supports abolishing the income tax on the health insurance paid into same sex couples' joint insurance policy?

at this point, the amount we PAY in insurance premiums on a partner's policy is TAXED as INCOME.

no, it means EVERYONE is going to get a "standard" deduction and ALL employer-provided health insurance is going to get taxed as income.

tristanrobin · 03-09-2007, 08:56 PM

well, that sucks

so, since I've been paying it for years, it does seem more fair now LOL

(sorry you get stuck with it though LOL)

caffeinebuzzchick · 03-09-2007, 09:03 PM

Quote:

Originally Posted by tristanrobin

well, that sucks

so, since I've been paying it for years, it does seem more fair now LOL

(sorry you get stuck with it though LOL)

now that i think about it, i recall having to do that when i worked in HR at the college (it was kind of a pain in the arse to do, too.... from a paperwork perspective, i mean!!!!)

i just think that the working poor who don't get insurance through their jobs and can't afford health insurance now won't be able to afford it if this legislation goes through.