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Effectiveness of tax credits for health insurance premium: Evidence from the health insurance tax credit

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  • Dajung Jun

Abstract

With the push to repeal the Affordable Care Act, there is renewed interest in using tax credits to increase health insurance coverage. Another tax credit‐driven policy, the Health Insurance Tax Credit (HITC), was implemented during 1991–1993. To date, only one paper has analyzed the effectiveness of the HITC on coverage rates. In this paper, I reexamine the effectiveness of the HITC by using the Survey of Income Program Participation and provide the first estimates of its effects on utilization and self‐reported health status. Despite using the different data set, I find a similar result regarding coverage as the previous paper—the effect of the HITC was about 5.8 percentage points. I also find that self‐reported health was significantly improved because of the HITC. I conclude by discussing the implications of these findings on the larger debate regarding current health care reform.

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  • Dajung Jun, 2018. "Effectiveness of tax credits for health insurance premium: Evidence from the health insurance tax credit," Health Economics, John Wiley & Sons, Ltd., vol. 27(10), pages 1609-1616, October.
    • Handle: RePEc:wly:hlthec:v:27:y:2018:i:10:p:1609-1616
    DOI: 10.1002/hec.3785
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    1. Merve Cebi & Stephen A. Woodbury, 2014. "Health Insurance Tax Credits, The Earned Income Tax Credit, And Health Insurance Coverage Of Single Mothers," Health Economics, John Wiley & Sons, Ltd., vol. 23(5), pages 501-515, May.
    2. Janet Currie & Jonathan Gruber, 1996. "Health Insurance Eligibility, Utilization of Medical Care, and Child Health," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 431-466.
    3. Christopher J. Ruhm, 2000. "Are Recessions Good for Your Health?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(2), pages 617-650.
    4. Nada Eissa & Hilary W. Hoynes, 2006. "Behavioral Responses to Taxes: Lessons from the EITC and Labor Supply," NBER Chapters, in: Tax Policy and the Economy, Volume 20, pages 73-110, National Bureau of Economic Research, Inc.
    5. Baughman, Reagan A., 2005. "Evaluating the Impact of the Earned Income Tax Credit on Health Insurance Coverage," National Tax Journal, National Tax Association;National Tax Journal, vol. 58(4), pages 665-684, December.
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