Bush Wants Health Insurance Tax Breaks

Jan. 28, 2008 — President Bush proposed new tax breaks for individuals who
buy their own health insurance, making the proposal the only new health care
initiative of his final year in office.
The proposal came in President Bush’s final State of the Union address to
Congress Monday night. In it he proposed making the cost of individual
insurance tax deductible, a benefit now reserved for employer-sponsored
coverage.
“This one reform would put private coverage within reach for millions,
and I call onthe Congress to pass it this year,” the president
said.
The policy would let people who purchase medical coverage on the individual
market deduct the costs of the coverage from their taxes. Right now such
coverage is not deductible, though individuals may save some money tax-free in
health savings accounts to spend on medical care.
The president’s proposal faces hurdles in Congress. Democrats who control
Congress have shown little appetite for the individual insurance market, where
coverage is usually far more expensive than in group coverage purchased through
an employer.
Views of Presidential Candidates
But the plan echoes that of several Republican presidential candidates.
Former Arkansas Gov. Mike Huckabee, Arizona Sen. John McCain, and former
Massachusetts Gov. Mitt Romney all favor changing the tax code in ways similar
to the president’s proposal. Former New York City Mayor Rudy Giuliani also
favors the change, along with offering a $15,000 tax exemption available to
families to buy coverage.
The tax proposal was the only new health care policy Bush announced in the
speech Monday. He reiterated past calls for expanding health savings accounts,
allowing employer and membership organizations to band together across state
lines to buy cheaper coverage in Association Health Plans, and curbing medical
malpractice liability lawsuits.
None of the policies is popular with Democrats.
“I don’t think we’ll see any significant health policy changes in the
110th [Congress],” Rep. Phil Gingrey, a Georgia Republican and physician,
told WebMD.
Cloning and Stem Cells
Bush also repeated calls for Congress to ban the cloning of embryos. Many members of Congress, including
some conservative Republicans, want to ban cloning for reproductive purposes
but keep it legal for the purposes of stem cell research.
The president called attention to a research trial reported in November in
which scientists succeeded in programming skin
cells to act like stem cells. That could give them the ability to grow into
many different bodily tissues, making them candidates for potential disease
cures.
“This breakthrough has the potential to moveus beyond the divisive
debates of the past by extending thefrontiers of medicine without the
destruction of human life,” Bush said.
The White House is at an impasse with Congress over embryonic stem cell
research. Congress passed a repeal of federal research limits, only to have it
vetoed by the president.
“I am glad that President Bush has recognized the recent advances in
stem cell research. This again highlights the need for a new, national
initiative supporting all types of ethical cell-based research, including
embryonic stem cell research,” Rep. Diana DeGette, D-Colo., author of
several stem cell research and cloning bills, said in a statement.