Sen. Ron Wyden (D-Ore.) has submitted a proposal to Senate Finance Chairman Max Baucus (D-Mont.) that he claims will complement employer-based health insurance and result in considerable tax savings for millions of Americans. The language was offered as an alternative to Baucus plan to pay for healthcare reform, which would cap the current tax exclusion on benefits at $17,240, the value of health benefits provided to federal employees plus 10%.
Wydens plan by comparison would essentially convert the current tax exclusion for employer-sponsored health benefits into an above-the-line fixed standard tax deduction. All Americans with qualified insurance would be eligible, not just those in employer-sponsored plans.