Assessing the Combination of Public Programs and Tax Credits

Publication Date:

Publisher: Economic and Social Research Institute

Author(s): J. Feder; L. Levitt; E. O'Brien; D. Rowland

Research Area: Health

Type: White Paper

Abstract:

In designing this approach, professors Judith Feder, Ellen O' Brien, Larry Levitt and Diane Rowland argue that in the absence of comprehensive reform, it is most appropriate to target expansions to the population least able to afford coverage, and to avoid disrupting either the public insurance system that works quite well for low-income people or the popular employer-sponsored system that provides coverage for many Americans. They choose to focus their attention on ensuring that the low-income population has access to publicly subsidized insurance, and then explore the use of a tax credit to encourage higher-income people to obtain private insurance. They believe that a "layered "approach — with public coverage for the lowest-income population and some form of tax credit for modest income people—will be more effective than other combinations in expanding coverage, while minimizing the potential that new subsidies will substitute for existing public or private coverage.