Tax incentives as a solution to the uninsured: evidence from the self-employed

Inquiry. 2013 Nov;50(4):275-95. doi: 10.1177/0046958014522913.

Abstract

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.

Keywords: CPS; elasticity; health insurance; self-employment.

MeSH terms

  • Adult
  • Age Factors
  • Costs and Cost Analysis
  • Employment
  • Female
  • Humans
  • Insurance Coverage / economics*
  • Insurance, Health / economics*
  • Male
  • Medically Uninsured / statistics & numerical data*
  • Motivation*
  • Sex Factors
  • Socioeconomic Factors
  • Taxes / economics*