People with job-based coverage may have mixed feelings about this proposal. It would make job-based coverage less of a "benefit" - you will have to pay for the full cost by adding it to your income. However, this may have the benefit of increasing awareness of insurance costs (I, for one, had no idea how much my employer was contributing to the cost of my insurance until I checked with H.R.), which will make the cost of COBRA continuation coverage less of a surprise.
People who do not have job-based coverage should find the tax break helpful in offsetting the cost of coverage.
It will also be interesting to see what kinds of programs the states will develop to help people with the cost of insurance. There seems to be an ever-growing segment of the population which makes too much money to qualify for Medicaid, but not enough to pay for health insurance. It remains to be seen whether the "Affordable Choices Initiative" will be able to serve these Americans.
