Tax Equity Would Help Millions Of Americans

Apr 18, 2000

FOR IMMEDIATE RELEASE

CONTACT: Richard Coorsh

April 17, 2000

(202) 824-1787

e-mail: rcoorsh@hiaa.org

The following statement was released today by Chip Kahn, President of the Health Insurance Association of America (HIAA):

As Americans prepare to meet today’s tax filing deadline, too many of them realize that they have to pay more for health and long-term care insurance because they don’t get the tax breaks enjoyed by most Americans with employer-sponsored health insurance.

For example, federal income tax benefits for employer-sponsored family coverage for a family in the 28 percent tax bracket average $957.60. On the other hand, a self-employed individual in the same tax bracket purchasing the same family coverage receives a tax benefit of only $574.56. Meanwhile, most people who purchase individual coverage that is not employer-sponsored receive no tax benefit at all.

The same holds true for individuals who purchase their own private long-term care insurance. Currently, they must build up medical expenses that exceed 7.5 percent of their adjusted gross income before they can receive any kind of tax benefit for their long-term care insurance premiums.

Right now, more than 44 million Americans have no health insurance, and millions of Americans could secure payment for their future chronic health care needs by purchasing private long-term care insurance. However, all too often, they are prevented from purchasing coverage because they lack the wherewithal to do so.

We should do more to make health and long-term care coverage more affordable. Accordingly, HIAA’s InsureUSA proposal to help the uninsured calls for an immediate 100 percent tax deduction for people who purchase individual health insurance, and for the self-employed. HIAA also has joined with AARP in supporting legislation sponsored by Republican and Democratic Senators and Representatives that would give a 100 percent tax deduction for individuals who purchase their own long-term care insurance, as well as a federal tax credit for caregivers for people who require long-term care.

We urge all Members of Congress and the Administration to support these proposals, and to help give individuals and the self-employed the opportunity to provide health and long-term care insurance for themselves and their families.

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