The health insurance tax break

Scott Jagow Jan 24, 2007


SCOTT JAGOW: One of the ideas President Bush proposed last night was this: Treat the health insurance people get from their jobs as taxable income. For decades, it’s been tax-exempt. People with cheaper plans could take a tax deduction and so could those who buy insurance themselves.

PRESIDENT BUSH: With this reform more than 100 million men, women and children who are now covered by employer-provided insurance will benefit for lower tax bills. At the same time this reform will level the playing field for those who do not get health insurance through their job.

Joseph Antos is a health care analyst at the American Enterprise Institute. He says this would be a pretty good deal for the middle class.

JOSEPH ANTOS: The vast majority of people in the middle class don’t have that kind of coverage that would be adversely affected by the change and for a family, instead of being able to protect from taxes, you know, $11,000 worth of coverage, they’re going to get a tax break worth $15,000.

It’s $7,500 for individuals.

Of course, the President’s plan would raise taxes for about 30 million people with more expensive health plans. Democrats say that would penalize folks with good health benefits.

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