Health Insurance Blog

According to an article written by Robert Pear of the New York Times, broad consensus among the Democrats on the redeployment of our country’s health care system is not far off.

Democratic leaders in both houses said they would indeed make health insurance mandatory, requiring  individuals to carry health insurance coverage and employers to help pay for it.  The question is, how will they raise the necessary tax revenue to support it?  On way that has been discussed is taxing employer health benefits.

In addition to making health insurance compulsary, the bill outlines yesterday would allow people to enroll in a governement run health plan similar to Medicare.  There are other suggestion being floated by Senate Democrats that would limit the scope of Government involvement, but would still create a plan to compete with private health insurance companies via a “Co-op”.

Republican lawmakers introduced a new bill calling for tax payer credits for those purchasing health insurance, but does not include a public insurance choice. 

The Patients’ Choice Act would stop tax cuts for companies that provide health insurance.  Individuals and families would be given money to help them purchase health insurance coverage.  Lower income households would get even more money to buy private insurance plans.  The Republicans want to make it easier to comparison shop for health insurance and believe employer-based coverage is becoming a thing of the past as more and more benefits are being stripped.

Congress is pushing for a bill to reform health insurance by the end of the year.  An overview has been published outlining the options that are being considered and a health insurance mandate is on the table. 

The overview has the option of requiring Americans to be covered by health insurance.  Those who choose not to buy in and do not meet certain requirements for exemption would pay a tax which would be the same as the premium for the lowest price insurance option.  This mandate was an option that Obama opposed in his campaign.  The health-reform debate will continue for many more months, even after a decision has been made.

According to the Associated Press’ Melinda DeSlatte, the 2010 state budget may include tax breaks on Louisiana health insurance. Representative Gary Smith has proposed giving tax credits to small businesses that provide their employees with employer-sponsored health insurance. He also wants to offer tax credits to people who pay for individual health insurance policies, which is predicted to cost over $130 in lost tax revenue in its first year. These proposals would expand access to health insurance.

While the state currently has a billion-dollar budget deficit and plans to make cuts to health care programs, Smith believes that the health insurance tax credits will save the state government money in the long term, since fewer people would be uninsured and have to use state-funded health care services. Melinda says that Louisiana Governor Bobby Jindal has not yet expressed his opinion about this proposal but plans to make recommendations later this week.

Even though individual health insurance rates are rising across America, it’s not all bad news for one state! A KFSM News report says that a tax credit may be in the future for purchasers of Oklahoma health insurance. If the state legislature passes the proposal, individuals will be able to deduct the full cost of their health insurance on their income tax returns. The tax break would take effect in 2010 and beyond.

So far, the state House Revenue and Taxation Subcommittee has approved the bill, which is a good sign. Estimates claim that around $2.2 billion in health insurance premiums will be eligible for deduction. The tax credit will make health insurance more affordable, and is hoped to cut into the number of uninsured Oklahoma residents (currently about 600,000).

The New York State legislature has approved an increase in health insurance taxes to reduce the budget deficit, according to Alphonso O’Neil-White in the Buffalo News. Approximately $350 million worth of “patient services surcharges” and “covered lives assessments” (among other names for the fees) will be added to the already expensive cost of New York health insurance. There might be more to come: the upcoming budget for 2009-2010 looks to include about $420 million in new health insurance taxes and surcharges.

Alphonso states that the average NY State family pays anywhere from $900 to $1,500 per year of their health care premiums solely on these taxes! Also, these taxes make employers increasingly unable to afford to provide health insurance to their employees. More people will become uninsured and have to search for individual health coverage as a result.