From Families USA
February 22, 2000

New Patients' Bill of Rights Fact Sheets: Accelerating the Tax Deduction for the Self-Employed

What is proposed?
Under current law, people who are self-employed may deduct 60 percent of their expenses for health insurance from their income when computing federal income tax. This deduction is being gradually increased; by 2003 the self-employed will be able to deduct 100 percent of this expense. The pending proposals would accelerate this schedule so the self-employed would have full deductibility by 2000 (House bill) or 2001 (Senate bill).

What's wrong with accelerating the health insurance deduction for the self-employed?
Although there would seem to be no harm in simply speeding up the timetable for a change that is already slated, in fact this is a costly provision that would largely benefit those who are already purchasing insurance.

How many currently uninsured people would this provision tax deductions help?
The Joint Tax Committee estimates that this provision would cost $3 billion over 5 years , and that only 120,000 of the 44 million people who are uninsured would gain coverage due to the acceleration of deductibility.