Tax Credits, the Distribution of Subsidized Health Insurance Premiums, and the Uninsured

Mark V. Pauly, Department of Health Care Systems, University of Pennsylvania
Bradley Herring, Institution for Social and Policy Studies, Yale University
David Song, Department of Health Care Systems, University of Pennsylvania

Abstract

This paper investigates the impact of a$1,000 refundable tax credit for self-only coverage on net premiums and insurance purchases for a representative sample of potential buyers in the individual insurance market. Two methods are used to estimate the distribution of premiums: predicted premiums based on a sample of actual purchasers, and premium quotations drawn from an e-insurance website. In most of the simulations, the net premiums for half or more of the prospective buyers are reduced to zero or low levels. The number of uninsured is reduced by 21 to 85 percent, depending on the size of the deductible in the benchmark plan. However, the results are sensitive to assumptions about insurer underwriting practices.

Recommended Citation

Mark V. Pauly, Bradley Herring, and David Song (2002) "Tax Credits, the Distribution of Subsidized Health Insurance Premiums, and the Uninsured," Forum for Health Economics & Policy: Vol. 5: (Frontiers in Health Policy Research), Article 5.
http://www.bepress.com/fhep/5/5

 
 
 
 

ISSN: 1558-9544 ©1999-2008 The Berkeley Electronic Press™ All rights reserved.

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