Tax Subsidies for Health Insurance: Evaluating the Costs and Benefits / Jonathan Gruber.

Format:

Book

Author/Creator:

Gruber, Jonathan.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7553.

NBER working paper series no. w7553

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Tax Subsidies for Health Insurance

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2000.

Summary:

The continued rise in the number of non-elderly Americans without health insurance has led to considerable interest in tax-based policies to raise the level of insurance coverage. This paper describes a detailed microsimulation model that has been developed to evaluate such tax-based polices, and its findings for the impact of polices on government costs and insurance coverage. I find that while tax subsidies could significantly increase insurance coverage, even very generous tax policies could not cover more than a sizable minority of the uninsured population. But there are several design features which can clearly make tax policy more effective: using tax credits rather than deductions; making credits refundable; and addressing the timing mismatch between when insurance purchases are made and tax refunds are received. I also document a clear tradeoff between the scope of tax subsidies and their efficiency.

Notes:

Print version record

February 2000.