Tax Incentives as a Solution to the Uninsured: Evidence from the Self-Employed

Between 1996 and 2003, a series of amendments were made to the Tax Reform Act of 1986 that gradually increased the tax deduction for health insurance purchases by the self-employed (SE) from 25 to 100 percent. We study how these changes have influenced the likelihood that a SE person has health insurance coverage as the policyholder. The Current Population Survey is used to construct a data set corresponding to 1995–2005. Both the difference-in-differences and price elasticity of demand estimates suggest that the series of tax deductions did not provide sufficient incentives for the SE to obtain health insurance coverage.
Source: Inquiry: The Journal of Health Care Organization, Provision, and Financing - Category: Health Management Authors: Tags: Research Papers Source Type: research