Jan 20, 2004

FOR IMMEDIATE RELEASE

Washington, D.C. – President Bush used his State of the Union address to call for 100 percent deductibility of insurance premiums for individuals buying high-deductible insurance as a part of newly-created Health Savings Accounts (HSAs). HSA legislation allows for pre-tax contributions from employers and employees into a savings account that can be used for medical expenses. The intent is to have the contributions cover first-dollar medical costs until a health insurance plan deductible is met. High-deductible health insurance has lower premiums that are more affordable for individuals, employers and employees.

“Making health insurance premiums fully deductible extends the same tax treatment to individuals that company-sponsored plans receive,” said Todd McCracken, President of NSBA. “An individual no longer needs to rely on a business to offer an insurance plan to get affordable coverage.”

Bush also reiterated plans to offer a refundable tax credit to low-income Americans struggling to afford health insurance. This plan would make health insurance available millions, many of whom work for small businesses.

“Tax credits are the right approach to insuring millions of low-income families,” said McCracken. “The choice of care remains with the individual.”

To address the rising costs of health insurance the president encouraged malpractice reform and called for an end to frivolous lawsuits that increase the cost of health care for all Americans.

To keep the economy growing, the president called on Congress to make permanent the tax packages of 2001 and 2003. He singled out the death tax, reduced taxes on capital gains and taxes on small businesses and individuals. All are set to return to pre-tax cut levels if Congress fails to act.

“We fully support the president’s plan to keep this economy moving through lower taxes and a simplified tax code,” said McCracken.

Since 1937, the National Small Business Association has been an advocate for the interests of small businesses throughout the country, reaching over 150,000 small businesses today. We are proud to be the first national small business advocacy organization in the United States.