March 14, 2007
Tax Changes Will Treat All Workers with Insurance Equally
WASHINGTON, D.C. - Senator Orrin Hatch (R-UT) gave an enthusiastic endorsement of the President's plan to reform health care, saying it would discourage the high-cost, low-deductible plans that are driving up the price of health insurance for employers.
"I think the administration has come up with some very innovative and interesting ways of trying to resolve these problems and make sure that the approximately 48 million people who don't have adequate health insurance can have a crack at getting it for themselves and taking care of themselves rather than depending on welfare to do it for them," the senator said.
Senator Hatch, who sits on the Finance Committee, as well as the Health, Education, Labor and Pensions Committee, made his remarks in the most recent Tax Foundation Tax Policy Podcast (listen).
The President's plan includes changes to the tax code that would treat employer health insurance as taxable income but offer a standard deduction for all those who purchase health insurance. Hatch said the plan would treat all workers equally.
"Under the current law we provide a huge tax incentive for some people, generally well paid people and workers whose unions have negotiated strong health packages to get employer provided health insurance," he said. But self-employed workers and those who do not receive insurance from their employers receive no tax benefit for insurance they purchase on their own, he added.
"So this evens it up and it puts people who buy their own insurance on the same level as those who get their insurance from their employer."
Hatch also praised health savings accounts, calling them "a major part of the solution to our healthcare insurance problem."
"If something catastrophic occurs that an individual or family cannot afford they will be covered but more routine medical events that are affordable are not. So just as auto insurance doesn't cover oil changes and our home owners insurance doesn't cover the cost of furnace filters health insurance should not cover predictable routine care," he said. The interview is Number 23 in the Tax Foundation's Tax policy Podcast series. It's available online here.
The Tax Policy Podcast features an interview that sheds light on the nation's tax system. Best known for its annual calculation of Tax Freedom Day®, the Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
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