Proposal To Provide Tax Deductions For Health Insurance

Armen Hareyan's picture
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Presidential candidate and former New York City Mayor Rudy Giuliani(R) on Tuesday announced a proposal that would provide U.S. residentswith tax deductions to purchase individual health insurance as part ofan effort to shift more residents from employer-sponsored coverage, theNew York Times reports.

Underthe proposal, families could receive tax deductions of as much as$15,000 to purchase individual health insurance, and individuals couldreceive tax deductions of as much as $7,500 to purchase coverage.Families and individuals could place any excess funds in health savingsaccounts and use them to cover the cost of deductibles or other medicalexpenses. According to Giuliani, the proposal would increase the numberof residents who have individual health insurance policies, a shiftthat would allow health insurers to reduce the prices of such policies.

Giulianisaid that the proposal could include tax refunds and subsidies to helplow-income residents purchase individual health insurance (Santora, New York Times,8/1). However, he said that the proposal might take years to helpuninsured residents and might not provide health insurance for all U.S.residents. Giuliani said, "You have to start bringing the price downbefore you can figure out how many people you can include. It has to bedone incrementally. It can't be done with a magic wand all at once"(Gordon, Long Island Newsday, 8/1).

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Giulianidid not provide details about the cost of the proposal but said heshould have additional information by the fall (Ramer, AP/Seattle Post-Intelligencer, 7/31). He added that he opposes proposals to require all U.S. residents to obtain health insurance (New York Times, 8/1).

Reaction

According to health care experts, the proposal likely will notencourage U.S. residents to shift from employer-sponsored to individualhealth insurance (Long Island Newsday, 8/1). In addition,the proposal "still leaves Republicans far behind Democrats" on healthcare, an issue that has "been almost invisible" among Republicanpresidential candidates, the Washington Times reports (Dinan, Washington Times, 8/11).

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