Modify Federal Tax Code to Create Incentives for Individuals to Obtain Coverage

Elizabeth A. McGlynn

ResearchPublished Jan 8, 2010

The RAND Corporation's COMPARE Initiative provides information and tools to help policymakers, the media, and other interested parties understand, design, and evaluate health policies. The COMPARE website presents a range of policy options that allows the user to explore the effects of commonly proposed health care reforms.

This document explores how a refundable tax credit to offset the cost of health insurance premiums would affect health system performance along nine dimensions. A refundable tax credit would produce a slight gain in health as measured by life expectancy; 2.3 to 10 million people would become newly insured under this policy change. It is uncertain how the policy would affect waste or patient experience. Refundable tax credits would have no discernable effect on total health care spending, overall consumer financial risk, reliability of care, or health system capacity. Implementing refundable tax credits would be relatively easy.

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McGlynn, Elizabeth A., Modify Federal Tax Code to Create Incentives for Individuals to Obtain Coverage. Santa Monica, CA: RAND Corporation, 2010. https://www.rand.org/pubs/technical_reports/TR562z7.html.
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