"Tectonic Shift" Anticipated

From today's "Managing Your Healthcare" newsletter by Don Mazzella, a very interesting article on some anticipated proposals in the upcoming State of the Union address. Huge news for individuals who purchase healthcare "off the shelf"! — Mary Hobson

Tectonic Shift In Healthcare Payment Landscape Being Proposed By President Bush

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, according to published sources.

The proposal, to be announced Tuesday in his State of the Union address, has a two-fold purpose: reducing the cost of healthcare insurance for most Americans and providing an incentive for the uninsured to buy a policy.

While administration officials say the changes will not affect total tax dollar collections, the published reports are unclear as to whether the traditional exemption for employers who pay for healthcare will continue. At present, employers can deduct the cost of healthcare insurance for employees dollar-for-dollar.

Employees with policies costing above the $7,500 and $15,000 limits would pay taxes on the excess. Individuals and families who purchase healthcare insurance directly would, for the first time, have some tax relief.