President Bush’s Health Care Plan Deserves Careful Consideration

President Bush has proposed a very interesting health care plan.

Employers now get an unlimited deduction for health care. This would change.

Benefit Becomes Regular Income But New Deduction Reduces The Final Tax

The cost, of an employer plan, would become income to the employee but against that, the employee would get a large deduction.

In about 80% of the cases the deduction allowed, would be larger than the income received.

The excess would be applied to taxable income, thus reducing the tax of the recipient .

Mr. Bush’s plan would give every family a “standard deduction” of $15,000 and every individual a “standard deduction” of $7500.

Most Americans who are privately insured, are covered through their employer. The average cost of family plans provided by employers is $11,500. About 80% of employees have plans worth less than the amount of the deduction they would receive.

Those with plans worth more than $15,000 would pay a higher tax under the plan.
If a worker has an employer family plan worth, for example, $16,000, he would add $16,000 to income, subtract $15,000 and pay a tax on the $1,000 excess.

Most workers with plans worth more than $15,000 would be higher income workers.

Those with plans worth less than $15,000 would Have Very Nice Options

Some employees with expensive employer sponsored family plans could still benefit as long as the plan was worth less than $15,000.

For example, a family plan worth $14,500, would add the $14,500 to a worker’s income, but would offset it with the full $15,000 deduction wiping out the $14,500 of income and leaving $500, which would be applied to and reduce taxable income, by the leftover $500.

Even though this employee had an expensive plan, he is still in the 80% group that would save.

It gets better. If that same employee were to switch from a low deductible plan to a high deductible plan, for example, to a plan costing $10,000, he would then have a deduction of $5,000 instead of $500.

It is further likely he would make more economical health care choices, which is badly needed to bring down health care costs nationally.

An employee with an employer sponsored family plan worth only $5000 would add $5000 to income, deduct $15,000 from taxable income, thus shave $10,000 from taxable income.

Those Who Buy Their Own Insurance

Those 17 million Americans who pay for their own health care insurance would have no insurance income to declare, therefore they would just take the full deduction, for their appropriate filing status.

Other Features

The deduction could also be taken against payroll taxes.

Middle income families could save thousands under this plan; singles could also do very well.

This plan would increase taxes on upper incomes and decrease taxes on lower incomes.

Congress’s Joint Committee On Taxation (JCT) has recently reported that this health care plan would save the government $333 billion dollars over ten years. The function of the JCT is to “score” tax policy changes.

Democrats dismissed and derided this plan when it was proposed. They should look more closely. Estimates run as high as 10 million for lower income individuals who would gain coverage. Finally, benefits to millions of others and the nation seem to be very positive.

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Health Care Plans – How to Get the Best Rate

If you don’t have health insurance through your employer, you may have assumed that a health care plan will cost more than you can afford. However, there are many ways you can save on health insurance. Follow these tips to get the best rate for your family.

Consider Your Options

You have more options for health insurance than you think. For example, most states offer low-cost or no-cost insurance for children and seniors, as well as for low-income or unemployed adults. Check with your state’s department of insurance to see if you qualify for such a health care plan.

Follow a Healthy Lifestyle

You will pay less for your health insurance if you can show the insurance company that you have healthy habits. So quit smoking and start exercising and losing weight to save on your health insurance costs. You’ll also feel better and add years to your life.

Types of Private Health Insurance

Another alternative is private health insurance. You can keep your rates down by choosing your insurance wisely:

* Consider a PPO or HMO plan. You will need to choose your doctors and hospitals from a list approved by the insurance company, but your premium costs will be lower.

* Choose a plan with high deductibles. The higher your deductibles, the lower your premiums.

* Consider insurance that will just cover major medical illnesses, such as cancer and heart disease, and plan to pay for smaller expenses yourself.

Shop Around

As with any major purchase, you should comparison shop when you shop for insurance. Fortunately, the Internet makes it easy for you to compare insurance rates. You can go to an insurance comparison website and get fast quotes from multiple A-rated health insurance companies.

The best websites even let you talk with insurance professionals so you can ask questions and make sure you choose the best health insurance company with the best rate (see link below).

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