Expanding Access through Public Coverage: Permitting Families to Use Tax Credits to Buy into Medicaid or SCHIP

A new tax credit to help low-income families and individuals purchase health insurance can address the problem of affordability, but will not overcome other barriers these populations face in obtaining coverage. This paper proposes that families have the option of using a new tax credit to buy into...

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Bibliographic Details
Main Author: Alan R. Weil
Format: Article
Language:English
Published: SAGE Publishing 2001-05-01
Series:Inquiry: The Journal of Health Care Organization, Provision, and Financing
Online Access:https://doi.org/10.5034/inquiryjrnl_38.2.146
Description
Summary:A new tax credit to help low-income families and individuals purchase health insurance can address the problem of affordability, but will not overcome other barriers these populations face in obtaining coverage. This paper proposes that families have the option of using a new tax credit to buy into a state-administered system such as Medicaid or the State Children's Health Insurance Program. This option has three advantages. First, it allows families to remain with a single health program and health plan as their income fluctuates. Second, it provides an alternative to the complex and confusing individual insurance market. This alternative is community rated, does not use underwriting, and allows health plan behavior to be monitored closely by the state. Third, it allows the state to act as a financial buffer—helping overcome the barrier to participation that cash-flow problems and year-end reconciliation concerns are likely to create among a low-income population. Many people would want to use their tax credit in the private market, but the buy-in option increases the likelihood that the tax credit approach would succeed.
ISSN:0046-9580