Bush proposing health insurance changes

[Ron Burgundy]

AP - President Bush will propose a tax deduction of $7,500 for individuals and $15,000 for families regardless of whether they buy their own health insurance or receive medical coverage at work.

The proposal, to be announced Tuesday in his State of the Union address, is aimed at giving the uninsured an incentive to purchase a medical plan. It also is designed to encourage those with generous plans to either embrace cheaper insurance or pay taxes on the part that exceeds the deduction, a Bush administration official familiar with the proposals said Saturday.

If passed by Congress, the proposal would be the first time that workers could get a tax break if they bought their own insurance. But it also would be the first time that some employer-provided health care benefits could be taxed. Health care benefits provided by companies are currently exempt from income and payroll taxes.

In his nationally televised speech, Bush also will announce steps to take some federal money now going to hospitals and other facilities and give it to states for programs to reduce the number of uninsured people.

The cost of health care is growing more than two times faster than wages, making it harder for families to buy insurance and for employers to sponsor a health benefit for workers, Bush said Saturday in his weekly radio address.

"Our challenge is clear: We must address these rising costs, so that more Americans can afford basic health insurance," Bush said. "And we need to do it without creating a new federal entitlement program or raising taxes."

Further details of the two proposals were to be announced in the State of the Union address.

"The tax code unfairly penalizes people who do not get health insurance through their job," Bush said.

House Ways and Means Committee Chairman Charles Rangel (news, bio, voting record), D-N.Y., is not embracing the idea.

"This is a dangerous policy that ultimately shifts cost and risk from employers to employees and could result in a higher number of uninsured," Rangel said. "The new, Democratic majority in Congress is interested in relieving, not increasing, working families' tax burden."

But another senior administration official notes that the deduction is higher than the cost of an average policy for families, which currently is estimated at $11,500.

Because of this, about 80 percent of people with employer-based plans will actually see their tax liability fall because their insurance policies cost less than the deduction, he said.

Both officials spoke on condition of anonymity because they did not want to pre-empt the president's speech.

There are an estimated 46 million to 48 million people in the United States who are uninsured at some point during the year.

"Most of the uninsured are people who are working and they've got a little bit too high of income to qualify for Medicaid or other government programs. If they buy health insurance they have to pay for it entirely out of their own pocket," Mark McClellan, former administrator for the Centers for Medicare and Medicaid Services and former commissioner of the Food and Drug Administration, said in a telephone interview. "This would be a significant amount of new help for them."

Bush also wants to redirect federal dollars that hospitals and other institutions get to help cover costs for caring for the uninsured. With this money, states would set up programs to assist people in getting health coverage and help people with high-cost health conditions.

Several states are working to reduce the number of people living without health insurance.

California Gov. Arnold Schwarzenegger, for instance, has announced a plan that would cost $12 billion a year to extend health care coverage to most of the state's 6.5 million uninsured. That would make it the second state, after Massachusetts, to require everyone to carry insurance.

Hospital administrators are worried about what the president's plan will mean for their facilities. They fear they will get fewer dollars when they treat Medicare patients. They say federal reimbursements already fail to cover costs.

Bush, who has begun rehearsing drafts of the speech, left Saturday for Camp David with Secretary of State Condoleezza Rice, national security adviser Stephen Hadley and White House chief of staff Joshua Bolten. Before departing, he met with Rice and Defense Secretary Robert Gates to hear details of their recent foreign trips.

Rice was in the Middle East, and Gates returned to Washington on Saturday after a whirlwind tour that began last weekend in London and ended Friday in southern Iraq. In between he visited NATO headquarters in Brussels, Belgium, met with troops and officials in Afghanistan and made stops in Saudi Arabia, Bahrain and Qatar.

___

Associated Press Writer Kevin Freking contributed to this report.

source: http://news.yahoo.com/s/ap/20070121/ap_on_go_pr_wh/bush [link]

[6SpeedTA95]

Part of this plan is fantastic...part of it is absolutely ridiculous...taxing people for having health insurance that exceeds a certain nontaxable amount is ridiculous.

Offer tax breaks to those buying their own, I am 100% ok with that, hell 50 cents on the dollar tax incentives would be ok with me to help get poor or underpriveledged health insurance. But then taxing people with expensive plans because htey happen to have a good plan? I mean seriously what the hell is that all about?

This is worse than taxing employer sponsored tuition in excess of 5240/yr (something else our government taxes us on )

[Diesel66]

Originally Posted by 6SpeedTA95

Part of this plan is fantastic...part of it is absolutely ridiculous...taxing people for having health insurance that exceeds a certain nontaxable amount is ridiculous.

Offer tax breaks to those buying their own, I am 100% ok with that, hell 50 cents on the dollar tax incentives would be ok with me to help get poor or underprivileged health insurance. But then taxing people with expensive plans because htey happen to have a good plan? I mean seriously what the hell is that all about?

This is worse than taxing employer sponsored tuition in excess of 5240/yr (something else our government taxes us on )

I dont agree with it, but it is simple. Business paid insurance/tution is income. Why shouldnt the govt tax income.

[6SpeedTA95]

Originally Posted by Diesel66

I dont agree with it, but it is simple. Business paid insurance/tution is income. Why shouldnt the govt tax income.

Because its not income, its a benefit for working for xyz instead of abc. Income is money that I see as part of my salary...this starts a dangerous precedent of taxing our benefits no thanks.

[ballz2wallz]

I think it's ridiculous to make anyone pay for someone else's health insurance.

[Diesel66]

Originally Posted by 6SpeedTA95

Because its not income, its a benefit for working for xyz instead of abc. Income is money that I see as part of my salary...this starts a dangerous precedent of taxing our benefits no thanks.

false. income doesnt have to be money. If someone gave you a stock, that is income. If your boss gave you a gold watch, that is income.


Benefits are costs to the company and income to you.

[6SpeedTA95]

Originally Posted by Diesel66

false. income doesnt have to be money. If someone gave you a stock, that is income. If your boss gave you a gold watch, that is income.


Benefits are costs to the company and income to you.

Taxing that stuff is ridiculous IMO...we're overtaxed and this is just adding to the shit...

If I get a gift its a gift, my boss used his income that WAS taxed to get me that watch...if the company gives it to me then thats a benefit...taxing benefits is ridiculous.

[motivez]

Er, I'm confused, why would anyone think it's a good idea to tax people extra simply for having health insurance?

Are there other factors involved in whether or not they'll be taxed?

[6SpeedTA95]

Originally Posted by motivez

Er, I'm confused, why would anyone think it's a good idea to tax people extra simply for having health insurance?

Are there other factors involved in whether or not they'll be taxed?

Yes, the article says that if you're single and have 7500 or less worth of insurance benefits you wont be taxed. If you have a family thats 15k...so if you happen to be one of the lucky few who has a great insurance policy they're gonna be taxed on every dollar of contribution in excess of 15k.

[motivez]

What's the rationale behind it and where is the money going to go, though?

[6SpeedTA95]

Originally Posted by motivez

What's the rationale behind it and where is the money going to go, though?

Doesn't matter, its ridiculous but so you know...


The additional taxes brought in from this will be used to "subsidize" the tax breaks for others who are buying health insurance.

The bill is designed to encourage people to take "cheaper plans" aka worse plans through their employers to push down costs of insurance? sounds like whoever thought this up has done zero research on the medical and insurance industries.

[motivez]

I'm more for the benefits of national health care than I am for the potential detriments I think, but this doesn't even make sense to me.. I mean, the rationale is basically telling Americans to make sure they don't get the plan they may want because of the extra tax involved

[Diesel66]

Originally Posted by 6SpeedTA95

Taxing that stuff is ridiculous IMO...we're overtaxed and this is just adding to the shit...

If I get a gift its a gift, my boss used his income that WAS taxed to get me that watch...if the company gives it to me then thats a benefit...taxing benefits is ridiculous.

that is what I meant.


Read the IRS booklet, income is not limited to cash.

[6SpeedTA95]

Originally Posted by Diesel66

that is what I meant.


Read the IRS booklet, income is not limited to cash.

ohh jesus christ, i know its not limited to cash, my point is this is starting a horrible precedent and worst of all its being started by a so called republican and conservative someone I voted for

[Diesel66]

Originally Posted by 6SpeedTA95

ohh jesus christ, i know its not limited to cash, my point is this is starting a horrible precedent

except it isnt the start at all. other benefits have been taxed for a while






Only difference is before you had unlimited amount "deductable" and now it is 7500/15000.

[6SpeedTA95]

Originally Posted by Diesel66

except it isnt the start at all. other benefits have been taxed for a while






Only difference is before you had unlimited amount "deductable" and now it is 7500/15000.

What benefits at work does the government tax? tuition (which is gay) and now health insurance?

[Kytro]

Originally Posted by ballz2wallz

I think it's ridiculous to make anyone pay for someone else's health insurance.

On the other hand, it's ridiculous that someone should die due to lack of money.

[6SpeedTA95]

Originally Posted by Kytro

On the other hand, it's ridiculous that someone should die due to lack of money.

Umm...how so?

I think its ridiculous that I spend my money to save someone else, this directly impedes my ability to provide for myself and my family

[nbiggershaft]

Originally Posted by 6SpeedTA95

Yes, the article says that if you're single and have 7500 or less worth of insurance benefits you wont be taxed. If you have a family thats 15k...so if you happen to be one of the lucky few who has a great insurance policy they're gonna be taxed on every dollar of contribution in excess of 15k.

I may not be getting this right, but currently they get no tax break, under the proposed they would get a tax break. But you don't like it because they only get a tax break on what they spend under 15k?

[6SpeedTA95]

Originally Posted by nbiggershaft

I may not be getting this right, but currently they get no tax break, under the p