President Touts Plan To Expand Health Insurance Coverage

President Bush on Wednesday held a roundtable in Chattanooga, Tenn., to discuss his plan to expand health care coverage by providing standard tax deductions for people who purchase health insurance, USA Today reports (USA Today, 2/22).

Bush in January announced two health care proposals, including one that would offer a federal tax deduction of $7,500 for individuals and $15,000 for families who obtain health insurance on their own or through an employer, regardless of the cost of coverage. The proposal would for the first time levy a tax on the value of employer-sponsored health insurance in some cases.

Currently, employees are not taxed on the value of their employer-sponsored health insurance.

Under the proposal, individuals and families with employer-sponsored health insurance plans worth more than the proposed allowable deductions would pay taxes on the difference. The deduction would be available to all individuals and families who purchase health insurance, regardless of the value of their policies or whether they itemize deductions on their tax returns.

For U.S. residents who receive employer-based health insurance, the deduction would be offset by the cost of their coverage. The proposal would pose no net cost to the government over 10 years, according to the administration. Bush in the State of the Union address also advocated redirecting portions of existing federal funding to create "Affordable Choices" grants that would give states more flexibility to expand health insurance (California Healthline, 1/25).

At the roundtable, Bush said the "best decisions are made by providers and patients, not by governments and insurance companies" (USA Today, 2/22). He said that there currently is "a limited market for the individual," which "makes it hard to find a product that either suits your needs or you can afford" (Abramowitz, Washington Post, 2/22).

Bush added, "If you want a health care system that really works, you want the decision maker to be the individual, in consultation with somebody who knows what they're talking about -- somebody trained to help that person make the proper decision. That'd be your doctor." He also called for greater transparency in health care pricing (Feller, AP/Houston Chronicle, 2/21).

Bush on Tuesday held a similar discussion with health insurance executives in Washington, D.C. (Gay Stolberg, New York Times, 2/22).

Senate Health, Education, Labor and Pensions Committee Chair Edward Kennedy (D-Mass.) in a statement on Wednesday said, Bush's "proposals will only worsen the crisis by undermining the quality coverage that millions of working families now rely on and replacing it with a tax break that will benefit the wealthiest Americans" (Reynolds, Los Angeles Times, 2/22).

Rep. Rahm Emanuel (D-Ill.), chair of the House Democratic Caucus, said Bush's plan "does nothing to control costs and ... does nothing to expand the number of insured. Other than that, it is incredibly helpful."

Tennessee Gov. Phil Bredesen (D), who attended the roundtable, said he is glad Bush is beginning to address health care but added, "I get less excited about the tax deduction stuff because there are a lot of people ... for whom that's not going to make a difference."

Senate Finance Committee Chair Max Baucus (D-Mont.) called Bush's plan "an outside-the-box proposal" that deserves debate. "Whether or not it's enacted into law, he's started a discussion," Baucus said (Washington Post, 2/22).

Al Hubbard, director of the White House's National Economic Council, said, "We realize that the ultimate legislation is not going to look exactly as the president proposed and that there's going to be compromise on both sides" (New York Times, 2/22).