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Refundable Tax Credits for Health Insurance: The Sensitivity of Simulated Impacts to Assumed Behavior

Author

Listed:
  • David W. Emmons

    (American Medical Association)

  • Eva Madly

    (W.E. Upjohn Institute)

  • Stephen A. Woodbury

    () (W.E. Upjohn Institute and Michigan State University)

Abstract

We replicate and extend a simulation model developed by Jonathan Gruber with the goals of illuminating Gruber's modeling of health insurance coverage under a tax credit and examining the sensitivity of the results to changes in the model's key parameters. The replications suggest that a refundable tax credit of $1,000 for a single individual or $2,000 for a family for private health insurance would reduce the number of uninsured individuals by between 17.5 and 28 percent and require new government expenditures of between $16.6 and $44 billion, of which about $7.4 - $9.7 billion would be for coverage of previously uninsured individuals. These wide simulated ranges highlight the uncertainty inherent in modeling the effects of health insurance tax credits and suggest that progress on the issue of tax credits for health insurance will require improved evidence on the likely take-up rate of a credit.

Suggested Citation

  • David W. Emmons & Eva Madly & Stephen A. Woodbury, 2005. "Refundable Tax Credits for Health Insurance: The Sensitivity of Simulated Impacts to Assumed Behavior," Upjohn Working Papers and Journal Articles 05-119, W.E. Upjohn Institute for Employment Research.
  • Handle: RePEc:upj:weupjo:05-119
    as

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    References listed on IDEAS

    as
    1. Matthew Rabin & Ted O'Donoghue, 1999. "Doing It Now or Later," American Economic Review, American Economic Association, vol. 89(1), pages 103-124, March.
    2. Janet Currie, 2004. "The Take Up of Social Benefits," NBER Working Papers 10488, National Bureau of Economic Research, Inc.
    3. Gruber, Jonathan, 2000. "Microsimulation Estimates of the Effects of Tax Subsidies for Health Insurance," National Tax Journal, National Tax Association, vol. 53(n. 3), pages 329-42, September.
    4. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-1035, December.
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    7. Gruber, Jonathan, 2000. "Microsimulation Estimates of the Effects of Tax Subsidies for Health Insurance," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(3), pages 329-342, September.
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    More about this item

    Keywords

    health; insurance; Gruber; tax; credit; Woodbury; Emmons; Upjohn;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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