Bush Health Proposal in State of the Union Message Won’t Make

The Proposal Provides Disproportionate Tax Breaks for People in Highest Tax Brackets

In his State of the Union address, President Bush reportedly plans to emphasize affordability of health care and will promote a new tax deduction proposal for persons purchasing health insurance. The following is the statement of Ron Pollack, Executive Director of Families USA, about the president’s expected message:
 
"The President’s health proposal offers such small relief for uninsured, moderate-income, working families that health coverage will remain unaffordable. It’s like throwing a 10-foot rope to someone in a 40-foot hole.

"The President’s proposal is flawed and, if not dead on arrival, will certainly be wounded on arrival.

"The proposal’s biggest shortcoming is that it offers a tax deduction rather than a tax credit. It is, therefore, of very limited value. Individuals with less than $31,850 in taxable income are in a 15 percent tax bracket, and therefore the new tax deduction will provide precious little relief.

"For example, a tax deduction for someone in the 15 percent tax bracket provides only $1,125 in tax relief. This means that moderate-income people will still be left with a price tag of thousands of dollars for premiums, to say nothing of the significant additional costs for deductibles and copayments. This will leave affordable health coverage out of reach for tens of millions of Americans.

"On the other hand, the proposal provides disproportionately higher tax benefits for people who need help the least. People in the highest tax brackets will receive tax breaks that are more than twice as high as the purported relief for moderate-income workers.  

"Instead of this ill-advised proposal, the President should expand health coverage for the 9 million children who are uninsured when Congress reauthorizes the State Children’s Health Insurance Program (SCHIP) later this year."

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Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan and advocates for high-quality, affordable health care for all Americans.

1201 New York Avenue NW, Suite 1100 · Washington, DC 20005
202-628-3030 · Email: info@familiesusa.org · www.familiesusa.org