REVISITING THE EFFECTIVENESS OF THE HEALTH INSURANCE TAX CREDIT

With the push to repeal the Affordable Care Act (ACA) and replace it with the American Health Care Act (AHCA), there is renewed interest in using tax credits to increase health insurance coverage. A similar tax credit-driven policy, the Health Insurance Tax Credit (HITC), was implemented from 1991 to 1993. To date, only one paper (Cebi & Woodbury, 2014) has analyzed the effectiveness of the HITC in increasing health insurance coverage. This paper re-examines the efficacy of the HITC by using a different data set from the Survey of Income and Program Participation (SIPP). This examination yields similar results to those in Cebi & Woodbury (2014), which is that the HITC increased health insurance coverage among single mothers by about 6.6 percentage points. Further, this study finds that the HITC appeared to influence the rates of usage of health care services. This paper concludes by discussing the implications of these findings for the broader debate surrounding health care reform in the present moment