U.S. tax policy and health insurance demand: Can a regressive policy improve welfare?
The U.S. tax policy on health insurance is regressive because it subsidizes only those offered group insurance through their employers, who also tend to have a relatively high income. Moreover, the subsidy takes the form of deductions from the progressive income tax system giving high income earners a larger subsidy. To understand the effect of the policy, we construct a dynamic general equilibrium model with heterogenous agents and an endogenous demand for health insurance. A complete removal of the subsidy may lead to a partial collapse of the group insurance market, reduce the insurance coverage and deteriorate welfare. There is, however, room for improving the coverage and welfare by extending a refundable credit to the individual insurance market.
Year of publication: |
2009
|
---|---|
Authors: | Jeske, Karsten ; Kitao, Sagiri |
Published in: |
Journal of Monetary Economics. - Elsevier, ISSN 0304-3932. - Vol. 56.2009, 2, p. 210-221
|
Publisher: |
Elsevier |
Subject: | Health insurance Risk-sharing Tax policy |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
US tax policy and health insurance demand: Can a regressive policy improve welfare?
Jeske, Karsten, (2007)
-
Health insurance and tax policy
Jeske, Karsten, (2005)
-
US tax policy and health insurance demand : can a regressive policy improve welfare?
Jeske, Karsten, (2007)
- More ...