Coverage and Cost Impacts of the President’s Health Insurance Tax Credit and Tax Deduction Proposals

This issue brief looks at the coverage impacts and costs of two components of the administration’s FY 2005 budget proposals to increase the affordability of health insurance: a new tax credit for people purchasing non-group health insurance and a new tax deduction for premiums for high-deductible, non-group health insurance policies.

The estimates were prepared by Jonathan Gruber, Ph.D., Professor of Economics at the Massachusetts Institute of Technology, using a micro-simulation model developed in conjunction with the Kaiser Family Foundation. The model predicts how individuals and firms would respond to changes in the health insurance market induced by changes in government policy.

Issue Brief (.pdf)