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Tax subsidies for employment-related health insurance: estimates for 2006
Thomas M Selden1, Bradley M Gray
1Center for Financing, Access, and Cost Trends, Division of Modeling and Simulation, Agency for Healthcare Research and Quality (AHRQ), in Rockville, Maryland, USA. tselden@ahrq.gov
Abstract:
Employment-related health insurance is subsidized through exemptions from federal and state income taxes, as well as from taxes for Social Security and Medicare. Proposals to modify this subsidy are a perennial subject of policy debate. We present tax-subsidy projections from a new data resource constructed using a statistical linkage between the establishment and household components of the Medical Expenditure Panel Survey (MEPS). We project that the total federal and state tax subsidy in 2006 for employment-related coverage of active workers will exceed 200 billion dollars. We present per worker tax-subsidy estimates and an analysis of insurance incidence by establishment characteristics.
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