Tax Credits Would Help Uninsured Obtain Health Coverage

Providing refundable tax credits to help the uninsured obtain health insurance, as Mr. Armey and Mr. Lipinski propose, not only would increase the number of Americans with health coverage but also would give consumers much more choice and control over their health care arrangements.

The tax system currently provides a generous subsidy worth more than $125 billion a year for individuals who obtain their health insurance through their employers, and the most generous subsidies go to those with higher incomes. However, those who do not have insurance available through their employers receive little or no assistance, and they are most often at the lower end of the income scale.

A refundable tax credit is an effective way to provide assistance to individuals to obtain their own health coverage. Individuals would be able to own their own health insurance, which they would choose from a number of competing private plans. A tax credit targeted to individuals will allow people to select coverage that best suits their needs and that is portable from job to job. This is good for those who need assistance to buy private coverage, and it is good for all Americans. It will help preserve a private and diverse health care system that is threatened by steady encroachment of government-run health care programs.

Grace-Marie Arnett       John S. Hoff, Esq.
President       Trustee

The Galen Institute is a not-for-profit organization committed to research and education on the effect of this country’s tax policy on health care and the uninsured.


About the author