New Proposal For Health Insurance
Health and Taxes
Who needs universal healthcare? The United States has long needed a debate over health care and taxes. Will President Bush?s offer to make health insurance a more viable option for individuals in America work?
With all of the moaning and groaning in America we still have the most advanced health care in the world. This is partly due to the fact that we still have a private market for insurance. Although the current tax programs available are pretty good by no means are they perfect. One of the current problems is that current tax policy lets corporations get bigger tax breaks than individuals. We need to close this gap in the years upcoming. Are corporations the entities that need these tax breaks? Or is it the small business owner that falls into the tax bracket labeled ?middle class??
This new "standard deduction" for health care by the president would at least be a progressive thought in the right direction of solving the problem. With the current laws giving employers the unlimited deduction and the little guy none, we will now give every family a $15,000 deduction ($7,500 for individuals) regardless of their insurance source.
Will wee see a slight tax increase for those who currently have the most expensive insurance plans? You could probably answer that question with a yes, but those are the people who can afford to do so. The national average of an employer-sponsored family plan runs about at about $11,300 annually. Nearly 75% of the 159 million employer insured Americans would benefits.
Who would be the big winners? Those that plan on buying their own insurance policy would save the most. This will not solve the problem for low-income earners, but because the tax deduction would apply on payroll and income taxes they will get a double savings. A good example would be family making $60,000 would have a tax savings of $4,500. Another would be a persona making $40,000 could buy high deductible plan (HDHP) $1,000 annually and get the $2,250 actual tax break. New private insurance products will be on the rise to accommodate for this new tax code.
Individuals who buy their own health insurance now struggle because there are so few of them and they can buy only in a single state market. That means insurers have little incentive to develop and market innovative programs. This will change if the tax treatment changes enough people to thinking that it makes more sense to have their own, portable policies than take whatever their employer offers. Keep in mind that the capitalist individuals devoted to selling health insurance as you now see selling will now roll over like your 401k or IRA.
New health insurance products will now put the policyholder in charge for spending dollars accordingly for their basic health needs. Removing the tax advantage will now give people more choices. New awareness by the participants with these tax incentive programs will get most individual out of the ?what is my copay?? mentality.