Overview

A new tax credit that could be used to purchase health insurance has emerged as a politically feasible mechanism to expand health insurance coverage in the U.S. Tax credits will certainly make coverage more affordable for low-income people, but a significant number will remain uninsured if there are no adequate, reasonably priced plans for them to buy. Many low-income people who would receive a health insurance tax credit work for employers that don't provide health insurance already. These individuals might use their tax credits to purchase health insurance in the non-group market, but such plans tend to be expensive, and are often less comprehensive than group plans. Allowing tax credit recipients to buy into the State Children's Health Insurance Program (CHIP) or Medicaid would provide them an alternative to the non-group market.

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