Friday, August 3, 2007

Rudy Giuliani Announces a Health Care Proposal That Would Provide Tax Incentives for Consumers to Purchase Individual Insurance

Rudy Giuliani announced that he will be proposing a system of individual tax incentives to enable consumers to purchase individual health insurance in addition to any employer options they might have. His proposals are also designed to shift the U.S. health insurance system away from employer-sponsored coverage.

Under the proposal:
  • Giuliani is proposing a $15,000 family/$7,500 individual standard tax deduction for anyone who does not get their health insurance coverage through an employer--they purchase it individually.
  • He would also provide additional subsidies to help low-income people buy health insurance.
  • He provided no details as to the amount of the subsidies or the plan's overall costs but said he would provide more detail in the coming months.
Giuliani said that he expects the proposal would increase the number of people who buy health insurance in the individual market. He also expects the standard deductions would enable consumers to put extra money into health savings accounts (HSAs).

While the Democratic candidates proposals focus on dealing with access first and cost later, Giuliani's focus is on bringing the cost of health insurance down with these market reforms and as costs come down more people would be insured, "You have to start bringing the price down before you can figure out how many people you can include. It has to be done incrementally. It can't be done with a magic wand all at once."

Read Giuliani's op-ed piece in the Boston Globe: "A Free Market Cure for the U.S. Health Care System"

A more comprehensive analysis of the Giuliani proposal in an earlier post: Giuliani Set to Announce a Health Care Proposal--But He Has to Make it Affordable for Everyone
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