Karen Davis Responds to President Bush's State of the Union Proposals

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<p>While it is encouraging that President Bush made health care a theme of last night's State of the Union address, his proposal to offer tax deductions to those who buy insurance would do little to cover the nation's nearly 47 million uninsured, says Commonwealth Fund President Karen Davis in her <a href="/cnlib/pub/enews_clickthrough.htm?enews_item_id=26468&return_url=http%3A%2F%2Fwww%2Ecmwf%2Eorg%2Faboutus%2Faboutus%5Fshow%2Ehtm%3Fdoc%5Fid%3D448217%26%23doc448217">new column.</a> And it falls far short of initiatives taking shape in states such as Massachusetts, California, and Pennsylvania.<br><br>Under the Administration's plan, individuals with health insurance--whether provided by employers or purchased on their own--would be entitled to a standard tax deduction. Those with employer-provided health insurance, however, would have the employer contribution counted as taxable income.<br><br>Davis says the biggest benefactors of the plan would be those currently purchasing coverage through the individual market, 40 percent of whom make more than $50,000 a year. Yet, lower-income families and the uninsured would be unlikely to benefit, both because they are in low tax brackets and because they would still be unable to afford the insurance premiums.<br><br>Moreover, the plan could cause employers to drop their health benefits, especially in parts of the country where premiums are highest, in industries that disproportionately cover older workers, and in the small business sector.<br><br>Read the column on the <a href="/cnlib/pub/enews_clickthrough.htm?enews_item_id=26468&return_url=http%3A%2F%2Fwww%2Ecmwf%2Eorg%2Faboutus%2Faboutus%5Fshow%2Ehtm%3Fdoc%5Fid%3D448217%26%23doc448217">Fund's Web site</a> for Davis's complete analysis.</p>