Republicans Propose Tax Credits for Health Insurance

Posted in Health Insurance

May 20th, 2009

In opposition to the Democrats’ plan to overhaul the nation’s health care system, the Republicans have a proposal of their own – offer a tax credit for health insurance. This is just one of many back-and-forth debates between the parties as the new administration looks to straighten out the economy and more.

The Democrats have set in motion a plan that will ensure public insurance coverage through companies as a requirement. As a result of providing health insurance benefits to their workers, employers would receive a tax break.

Additionally, President Obama has asked Congress to draw up legislation that will essentially reduce health-care costs and expand coverage. His plan is meant to offer health insurance to all working citizens and also force competition for private insurers, which will further help lower costs.

Republicans dislike the plan for national insurance coverage because it would “bureaucratize” the health system and potentially stifle the creation of jobs. So instead, they propose an alternative to the Democrats’ plan called the Patients’ Choice Act. It would offer an annual tax credit of $2,300 to each individual and $5,700 to each family so that they could offset their health insurance rates. Additionally, low-income families would receive extra money so that they could buy private insurance.

Benefits of both Plans
While the two plans seem to be largely unique in agenda, there are a few similarities that should be mentioned:

• Both want to create insurance exchanges that would make it easier to make health insurance comparison shopping much easier.
• Both want to move some health-care funds toward finding ways to prevent chronic diseases like diabetes and heart disease to help lower coverage costs through preventative measures.

Since Democrats currently carry both the House and Senate, the likelihood of the Republicans’ plan passing is slim. But if it were in greater contention, which would you prefer?