A May 21 Wall Street Journal article reported that a Republican alternative health-care reform proposal “would eliminate the tax break that employers receive for providing health-insurance benefits to their workers. Instead, it would give an annual tax credit of $2,300 to each individual and $5,700 to each family that they could use to offset the cost of their health insurance.” The Journal later noted, “Karen Davenport, director of health policy at the liberal-leaning Center for American Progress Action Fund, said the Republican plan's tax subsidy wouldn't cover half of the cost of the average family's health-care premiums.” But the Journal ignored relevant data supporting the claim that the Republican plan's tax credits would cover approximately half the cost of health insurance.
Indeed, in its 2008 Employer Health Benefits Summary of Findings, the Kaiser Family Foundation estimated, “In 2008, the average annual premiums for employer-sponsored health insurance are $4,704 for single coverage and $12,680 for family coverage, up about 5% from the 2007 average premiums.”
From the May 21 Wall Street Journal article:
The government would run a health plan “with the compassion of the IRS, the efficiency of the post office, and the incompetence of Katrina,” according to a summary of the Republicans' plan unveiled on Wednesday. Called the Patients' Choice Act, it would eliminate the tax break that employers receive for providing health-insurance benefits to their workers. Instead, it would give an annual tax credit of $2,300 to each individual and $5,700 to each family that they could use to offset the cost of their health insurance. Low-income families would get extra money to buy into private insurance plans.
Rep. Paul Ryan (R., Wis.) said the system of employer-based coverage is becoming “a 21st century relic” as companies become less generous with benefits.
President Barack Obama has tasked Congress with drawing up legislation to reduce health-care costs and expand health-insurance coverage. He and many Democrats want to create a new public insurance plan to help cover the uninsured and create competition for private insurers.
The Republican plan introduced Wednesday shares some things in common with measures Democrats are pushing. Both parties want to create insurance exchanges that make it easier to comparison-shop for health-care plans. They also want to shift health-care dollars toward preventing chronic diseases like heart disease and diabetes, not just because it will make Americans healthier, but because prevention is cheaper than treating people once they get really sick.
Senate Finance Committee Chairman Max Baucus (D., Mont.), who is leading the effort to draft a health overhaul, said that while this Republican measure meets many of his goals, eliminating the tax incentives for employer-provided health benefits “would destroy the employer-based health-care system we have today.”
Karen Davenport, director of health policy at the liberal-leaning Center for American Progress Action Fund, said the Republican plan's tax subsidy wouldn't cover half of the cost of the average family's health-care premiums.
