NewsRxManagedCare via NewsEdge Corporation : 2005 FEB 7 - (NewsRx.com & NewsRx.net) -- Wisconsin residents would receive a break on their state taxes for contributions to health savings accounts under a bill the Legislature's budget committee approved January 18, 2005.
The Republican-controlled Joint Finance Committee voted 12-4 along party lines to approve the tax break, which would save state residents an estimated $38.7 million over the next 8 years. GOP lawmakers said the tax break would encourage people to open the accounts, giving them another tool to deal with rising costs of healthcare.
Tax deductions on the contributions already exist in most other states.
Are we going to make people in Wisconsin pay more for their healthcare than in other states?
asked Representative Scott Jensen, R-Waukesha.
But Democrats countered the state can't afford to lose that revenue at a time when it is facing a $1.6 billion deficit in the two-year period starting next July. They also argued the proposal would only benefit about 25,000 state residents and do little to improve healthcare.
Under federal health savings account provisions, someone covered by a high-deductible health insurance plan can make pretax contributions to the funds to cover healthcare costs. To qualify, they have to be enrolled in healthcare plans with deductibles of at least $1,000 for an individual and $2,000 for a family.
The contributions are already deductible from federal taxes. Earnings and employer contributions can accumulate tax-free. The plan approved January 18, 2005, would grant the same tax breaks for state taxes.
The proposal has to pass both houses of the Legislature and be signed by the governor to become law.
Governor Jim Doyle vetoed a similar proposal last year, saying it would not help low-income workers. He also said he feared it would encourage employers to lower their healthcare coverage and only offer high-deductible plans.
This article was prepared by Managed Care Weekly Digest editors from staff and other reports. Copyright 2005, Managed Care Weekly Digest via NewsRx.com & NewsRx.net. .end (paragraph)<<NewsRxManagedCare -- 02/07/05, p. 85>>
