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Tax credits and purchasing pools: will this marriage work?
Issue Brief (Center for Studying Health System Change)
|October 18, 2001
Summary
Federal tax credits could help low-income families afford health insurance. Linking these credits to purchasing pools may solve risk selection issues, ensuring coverage for the chronically ill.
Area of Science:
- Health economics
- Public health policy
Background:
- Growing congressional interest in federal tax credits for low-income family health insurance.
- Tax credit policies must address risk selection to cover the chronically ill.
Purpose of the Study:
- Assess the role of purchasing pools in linking tax credits to health insurance.
- Examine key issues and implications of integrating tax credits with purchasing pools.
Main Methods:
- Analysis of information from the Center for Studying Health System Change (HSC) site visits to 12 communities.
- Review of existing research on health insurance purchasing pools.
Main Results:
- Proposals linking tax credits to purchasing pools can mitigate risk selection by pooling diverse health risks.
- Voluntary purchasing pools have historically shown limited success.
Conclusions:
- Linking tax credits to purchasing pools offers a potential strategy for broader health insurance coverage.
- Careful policy design is crucial to overcome challenges associated with purchasing pools and ensure equitable access for all, including the chronically ill.
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