Health plan takes narrower approach, analysts say

President Bush's plan to help Americans purchase affordable health insurance takes a narrower approach than proposals by congressional Democrats and others to help the nation's 47 million uninsured, and would have a much smaller impact, health policy analysts said.

Bush proposed tax breaks for individuals who buy health insurance, and offered federal aid to states, such as Massachusetts, that subsidize basic private health insurance for people with low incomes.

White House officials this week estimated that the tax break would enable about 3 million people to get insurance and said they expected more could get covered through new state initiatives.

Other plans pending in Congress or recently proposed could insure a much larger number of people.

For example, a "Medicare for All" plan, proposed by a group of congressional representatives and senators and backed by Senator Edward M. Kennedy of Massachusetts, seeks to cover the uninsured by extending the federal Medicare program to people under 65.

A bill filed by Senator Ron Wyden , an Oregon Democrat, would provide all Americans with coverage similar to members of Congress, by helping them buy private coverage with subsidies from employers, the federal government, and tax deductions.

But healthcare analysts say it is unlikely that any of the measures will become law during this administration. The Bush plan is being opposed by many Democrats. And the Democratic plans would probably be vetoed by Bush.

"In Washington, we have this huge ideological gap on how to reform healthcare," said Drew Altman, president of the Kaiser Family Foundation, a nonpartisan health policy organization. "But we're seeing the beginning of a new national debate. "

Under Bush's proposal, every individual who purchased health insurance, whether through an employer or not, would get a tax deduction of $7,500; every family could take a $15,000 deduction.

"Changing the tax code is a vital and necessary step to making healthcare affordable for more Americans," particularly for those who don't get coverage through their employer, Bush said last night.

The value of the insurance would count as income, reducing the benefit of the deduction. The result would be a tax break for 80 percent of families with insurance, the administration estimates. And people without insurance could buy private coverage and get a tax deduction for the first time, the White House said.

The tax deduction would be funded by a new tax on the portion of any insurance policy worth more than $7,500 for an individual or $15,000 for a family. Bush had previously suggested that plans above those levels of coverage are driving up the cost of healthcare. The administration says about 30 million people would be subject to the tax unless they bought less expensive plans.

Other proposals to revise how health insurance is treated in the tax code are pending in Congress.

"Changing the tax treatment is really one of the fundamental problems the healthcare system faces," said Nina Owcharenko, a senior health policy analyst with the Heritage Foundation who supports the Bush plan.

But the administration said the tax break will not help many people who are uninsured, particularly those who are too poor to pay taxes or those excluded from buying coverage because they have preexisting conditions.

The second part of Bush's proposal would provide grants to states to subsidize private insurance for people who make too much to qualify for Medicaid.

The proposal is designed to encourage initiatives, such as those in Massachusetts, that use some funds currently paid to hospitals and other healthcare providers to help insure low-income people. The initiative would not involve any new funds.

Yet Bush said, "these grants would give our nation's governors more money and more flexibility to get private health insurance to those most in need."