TITLE

Private Health Insurance: Potential Tax Benefit of a Health Insurance Deduction Proposed in H.R. 2990: HEHS-00-104R

PUB. DATE

April 2000

SOURCE

GAO Reports;4/21/2000, p1

SOURCE TYPE

Government Document

DOC. TYPE

Article

ABSTRACT

Pursuant to a congressional request, GAO provided information on the potential tax benefit individuals could receive as a result of a health insurance tax deduction proposed in H.R. 2990, focusing on: (1) GAO's estimation of both the number of people who would potentially be eligible for a tax deduction under this proposal; and (2) the potential value of such a deduction. GAO noted that: (1) had H.R. 2990 been the law in 1998, about 39 million people could potentially have benefited from the proposed tax deduction, including: (a) those who were uninsured and then decided to purchase coverage; (b) those who had individual insurance; and (c) those who had employer-sponsored insurance with no employer subsidization; (2) another 22 million potentially eligible individuals could not have benefited from the proposed deduction either because they were in the 0-percent tax bracket or because they did not file federal income taxes in 1998; (3) most of those who could have benefited from the proposed deduction--nearly 31 million--were in the 15-percent tax bracket and, at most, could have received a 15-percent reduction in premiums; (4) because the deductible portion of the premium would have been phased in over a 6-year period, the actual reduction in premiums could have been significantly lower until tax year 2007; (5) GAO could not estimate the percentage of people who might have purchased health insurance as a result of the proposed reduction; (6) individuals whose employers paid one-half or less of the total premium for their insurance could also have benefited from the deduction; (7) the number of individuals, however, is not available; and (8) an estimated 76 million people had insurance that was partially subsidized by an employer, although only a small fraction of these individuals would have been likely to benefit from the proposed deduction because most employers who sponsor health insurance pay more than half of the total premium.

ACCESSION #

18208300

Tags: HEALTH insurance -- Taxation;  TAX deductions;  HEALTH insurance -- Self-insurance;  HEALTH insurance -- Taxation -- Law & legislation;  INSURANCE law -- United States;  HEALTH insurance -- United States;  HEALTH insurance -- Law & legislation

 

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