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 credit for health insurance purchases by the self- employed from 25 to 100 percent. We study how these changes have in uenced the likelihood that a self-employed person has health insurance coverage as the policy holder. The Cur- rent Population Survey is used to construct a data set corresponding to 1995-2005. Both the dierence-in-dierence and price elasticity of demand estimates suggest that the series of tax credits did not provide sucient incentives for the self-employed to obtain health insurance coverage.