Bush tax plan would hurt elderly, poor and unhealthy, analysts say

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A new Bush plan that would make taxable health benefits over a certain threshold does little to control rapidly rising healthcare costs. It also would leave many older and sicker Americans unable to find coverage, according to public health analysts speaking during a recent panel discussion at The Brookings Institution.

The Bush plan would exempt families with health insurance from paying income or payroll taxes on the first $15,000 in health insurance compensation. Singles would not pay income or payroll taxes on the first $7,500 as part of the plan, which would take effect in 2009.

The proposal would cause employers to drop coverage and instead give workers money to purchase insurance in the private market, predicted Henry Aaron, a senior fellow at the Washington think tank. Then older and sicker workers would have trouble getting affordable coverage, he said.