UNINSURED: Johnson to Propose Health Insurance Tax Breaks
Adding to growing piles of proposed tax reforms aimed at lessening the ranks of the uninsured, Rep. Nancy Johnson (R-CT) unveiled a measure yesterday that would combine tax credits and deductions to encourage individuals to buy health insurance, including long-term care coverage. CongressDaily/A.M. reports that Johnson's proposal, announced yesterday at a Council for Affordable Health Care briefing, would create a $21.4 billion, ten-year tax credit for people who buy their own health coverage, equal to 60% of the cost of insurance, or up to $1,200 for individuals and $2,400 for families. The benefit would begin to phase out for individuals earning $30,000, ending at $40,000, and families earning $60,000, ending at $70,000. Congress Daily/A.M. reports current tax breaks for individual health insurance apply only to the self-employed. Johnson's bill would also create an "above-the-line" tax deduction for anyone paying more than half of his or her health insurance premium, projected to cost $58.6 billion over 10 years. The long-term care provision would also provide an "above-the-line" deduction -- meaning even those who do not itemize would benefit -- of "50% of the policy's cost in the first year, rising to 100% in 10 percentage point increments for every continuous year the policy is held," with faster implementation for those over 60. CongressDaily/A.M. reports that the long-term care provision would also include President Clinton's proposed $1,000 tax credit for long term care (Rovner, 5/20). Agie Hunter, CAHI's director of federal affairs, noted that the proposal would not replace the current employer-based system. "Although the tax credit belongs to the individual, in most cases, it would be managed by the employer though the payroll system," she said (CAHI release, 5/20).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.