Bush's Health Plan: Does It Help You or Hurt You?

Jan. 23, 2007 — -- President Bush's new health plan could either put more money in or take more money out of your pocket.

It all comes down to taxes.

The uninsured will get tax breaks to entice them to buy their own insurance, while those who spend too much on their coverage may get hit with taxes.

Bush's proposal, which he described in tonight's State of the Union address, would remove income or payroll taxes on the first $15,000 each family spends on health care, while single people would be allotted a $7,500 tax break.

But any spending that overreaches this amount will be taxed, and that will most affect those already covered by their employers. Although most of the 160 million people insured through work will initially get a tax break, they'll end up paying taxes if the cost of their plan exceeds the deduction cap.

By managing federal health care funding more effectively and by offering tax benefits, the White House promises to make health care more available and affordable. The plan "will level the playing field for those who do not get health insurance through their job," said Bush.

Finding Your Own Plan

The plan to revamp the way Americans are taxed for health care is getting a mixed reaction from doctors and health insurance experts.

In effect, the tax breaks could create "an incentive for individual folks and families to purchase some health insurance," said Dr. John Sbarbaro, professor of medicine and preventive medicine at the University of Colorado at Denver.

"They would get a tax break of $15,000 even if their insurance only costs $10,000" he added, "That alone could reduce the rolls of the uninsured."

Nearly 80 percent of the 47 million uninsured are in the working class but are not offered insurance through their employers.

Those who are encouraged to venture out into the health care market face a plethora of options, which may be confusing.

"Americans are pretty used to getting insurance from their employer," said Timothy McBride, professor of health management and policy at St. Louis University in Missouri.