Administration's Proposed Tax Credit For The Purchase Of Health Insurance Could Weaken Employer-Based Health Insurance

Publication Date: April 2004

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

Author(s): Edwin Park

Research Area: Health

Keywords: Tax code; Economic projections; Health insurance; Health care costs

Type: Report

Abstract:

As part of its fiscal year 2005 budget, the Administration has again proposed to provide a refundable tax credit to individuals and families for the purchase of health insurance in the individual health insurance market. The tax credit would be available to individuals and families who do not participate in employer-based coverage or public health insurance programs and would equal up to $1,000 for individuals and up to $3,000 for families with children. The full credit would be available to individuals with incomes below $15,000 per year and families with incomes below $25,000. The tax credit phases down as income rises above these levels and would phase out entirely when income reached $30,000 for individuals and $60,000 for a two-parent family of four.