Since President Bush announced a proposal during his State of the Union Address to give tax breaks to individuals to purchase healthcare insurance, many health policy experts have weighed in on the virtues and drawbacks of the plan. According to a Washington Post article, 100 million people with employer-sponsored health insurance will initially benefit from Bush’s plan, since they have policies that cost less than the $15,000 tax deduction. Also, the 17 million who purchase their own health insurance will pay less in taxes. But 30 million will experience a tax hike the first year. And after 10 years, only 60% of employer-sponsored policies will be worth less than the deductible--instead of 80% today--since premiums are expected to rise faster than the increase in the deduction, which is tied to inflation. Also, the poor won’t benefit from tax breaks, and they need the most financial help in obtaining health insurance.
Some say Bush’s plan may derail employer-sponsored health insurance entirely. “What it does is favor individual insurance,” Karen Davis, president of the Commonwealth Fund, told the Post. “The question is, should you try to undermine employer coverage? Employer coverage has lower administrative costs and it covers everybody in a firm, not just those who are healthy enough to pass a medical exam.”
