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Publication Date:
Publisher: Economic and Social Research Institute
Author(s): M.V. Pauly
Research Area: Health
Type: White Paper
Abstract:
Economist Mark V. Pauly proposes a tax-credit/coupon approach to expanding health coverage that he says, emphasizes the advantage of beginning reform with a relatively straight forward, financially feasible, and easily modifiable intervention. He stresses that there is much uncertainty about the response of insurers and consumers to major changes, and thus it is desirable to adopt an approach that could be easily changed as experience shows what works and what does not. Thus, he proposes a two-phase plan that would initially provide refundable tax credits to lower middle-income families and individuals, who make up 40 percent of the uninsured. If private markets work well in the first phase, then credit options would be extended to the poor, and participation would be made mandatory for those uninsured with incomes above 300 percent of the federal poverty level.