Proposal For New HSA Tax Deduction Found Likely to Increase the Ranks of the Uninsured

Publication Date: May 2004

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Robert Greenstein; Edwin Park

Research Area: Health

Keywords: Federal budget; Health care costs; Economic projections

Type: Report

Abstract:

At the cost of $25 billion over ten years, the President’s budget seeks to expand enrollment in Health Savings Accounts by allowing HSA participants to claim a tax deduction for the premium costs of high-deductible health insurance policies that they purchase in the individual health insurance market. Analysis by M.I.T. economist Jonathan Gruber, one of the nation’s leading health economists, finds that because of its adverse effects on employer-based coverage, this deduction would likely cause the ranks of the uninsured to increase by 350,000.