A bipartisan consensus favors public policy initiatives to expand health insurance coverage. This paper summarizes new Current Population Survey (CPS) data on health insurance coverage for the non-elderly and discusses the issues involved in subsidizing health insurance. We outline a tax credit option designed to diminish many health insurance market flaws. A simple model illustrates that the Administration's recent proposal for tax credits for nongroup insurance alone is equivalent to a general insurance tax credit (our preferred option) with a tax on employer-sponsored insurance (ESI). Thus, it runs the risk of doing harm - undermining the insurance that currently covers most nonelderly Americans.
ASJC Scopus subject areas
- Economics and Econometrics