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.
"It is very had to navigate the private health care market," McBride said. "People may pay more attention, but there will be a lot of transition anxiety -- people won't know where to go to determine what plan is the right one."
Is It Enough?
The president said these tax breaks will allow 3 to 5 million more Americans to buy health insurance.
But not everyone will benefit from the tax incentives.
Taxing health care spending over the capped amount "punishes people who suffer from one or more chronic illness," said Alan Sager, director of the health reform program at Boston University School of Public Health.
Other critics worry the plan will create a financial barrier, and preventive health care measures including screenings, vaccines and checkups may end up getting sacrificed.
These services have been proven to save money in the long run by preventing problems or solving them early. But if the patient exceeds his deductible, he may not be able to spend the money himself.
The president's plan "fails to address the fact that out-of-pocket expenditure will lead to a decrease in essential health care services," said A. Mark Fredrick, co-director of the Center for Value Based Insurance Design at the University of Michigan.
The more money people have to pay on their own to get such care, the less likely they are to do it -- and that increases the risk of more expensive and preventable problems down the line.
"Call it the cancer tax," said Jerry Flanagan, the health director of the Foundation for Taxpayer and Consumer Rights. "Bush's scheme leaves out families that can't afford any insurance, and harms people who are charged very high premiums because they may have a job or a health condition that marks them for huge surcharges."
The president's proposal also affects federal funding within the states, helping them in their efforts to provide insurance to the poor or those hard to insure.
Ideally, states across the nation could use the funding to experiment with plans that might successfully decrease the uninsured population.
"That allows for creativity and an opportunity to determine what works and what doesn't work," said Sbarbaro.
Among critics and supporters, there is one thing most experts agree on -- dialogue on health care is important.
"Addressing the uninsured is a really positive step," said McBride. "This move might spur discussions about the issue."
Renewing the debate about health care at this point shows the increasing need for a change in the American health care system.
"Changes will not come about right away," said Jay Wolfson, professor of public health and medicine at the University of South Florida.
"But the sources of the discussion make it clear that this could be a major policy movement in the future."