Currently, the health benefits tax exclusion is only available when the health insurance/benefits are purchased within the workplace. Under the President's proposal, the deduction would be available to those who purchase insurance outside the workplace, or individually. The White House anticipates that this change if accepted by Congress will generate a significant reduction in the number of uninsured Americans. To pay for this expansion, employer provided health benefit coverage that exceeds the applicable tax would be taxable for the first time.
The President's Plan Includes Two Parts: Reforming The Tax Code With A Standard Deduction For Health Insurance So All Americans Get The Same Tax Breaks For Health Insurance And Helping States Make Affordable Private Health Insurance Available To Their Citizens.
- The President's Plan Will Help More Americans Afford Health Insurance By Reforming The Tax Code With A Standard Deduction For Health Insurance – Like The Standard Deduction For Dependents. The President's primary goal is to make health insurance more affordable, allowing more Americans to purchase coverage. The President's proposal levels the playing field for Americans who purchase health insurance on their own rather than through their employers, providing a substantial tax benefit for all those who now have health insurance purchased on the individual market. It also lowers taxes for all currently uninsured Americans who decide to purchase health insurance – making insurance more affordable and providing a significant incentive to all working Americans to purchase coverage, thereby reducing the number of uninsured Americans.
- Under The President's Proposal, Families With Health Insurance Will Not Pay Income Or Payroll Taxes On The First $15,000 In Compensation And Singles Will Not Pay Income Or Payroll Taxes On The First $7,500.
- At the same time, health insurance would be considered taxable income. This is a change for those who now have health insurance through their jobs.
- The President's proposal will result in lower taxes for about 80 percent of employer-provided policies.
- Those with more generous policies (20 percent) will have the option to adjust their compensation to have lower premiums and higher wages to offset the tax change.
The President's Affordable Choices Initiative Will Help States Make Basic Private Health Insurance Available And Will Provide Additional Help To Americans Who Cannot Afford Insurance Or Who Have Persistently High Medical Expenses. For States that provide their citizens with access to basic, affordable private health insurance, the President's Affordable Choices Initiative will direct Federal funding to assist States in helping their poor and hard-to-insure citizens afford private insurance. By allocating current Federal health care funding more effectively, the President's plan accomplishes this goal without creating a new Federal entitlement or new Federal spending.
Monday, January 22, 2007
Sneak Preview on the State of the Union
The White House has released the health care proposals that President will make in his State of the Union address tomorrow night: