Proposed federal policies to help low-income adults buy health insurance have focused on tax credits for purchasing health coverage in the individual insurance market. But a new study by The Commonwealth Fund finds that tax credits within the range of those contemplated in recent proposals would not be large enough to make health insurance affordable to women with low incomes.
In Health Insurance Tax Credits: Will They Work for Women?, researchers Sara R. Collins, Stephanie B. Berkson, and Deirdre A. Downey conclude that unless tax credits are combined with options to buy into group insurance, individual insurance market reforms, or other protections, relatively few low-income women are likely to use them.
The study was based on an analysis of premium and benefit quotes for plans offered in 25 cities, and information was obtained for women and men in excellent health who do not smoke. The authors found that with tax credits of $1,000 or $1,500, even healthy young women would have a difficult time finding a plan with an affordable deductible. (Current tax proposals provide tax credits at these amounts for women with annual incomes of $15,000 or less.) In some markets, no plans were available at these premium rates, even for 25-year-old women. Access to coverage worsened with age: in most cities, older women would not be able to find a plan with premiums in this range.
Tax credits would also buy less coverage for young women than they would for young men in many markets. This is despite the fact that policies offered on the individual market typically exclude maternity benefits. Younger men had access to more $1,000-premium plans and faced lower deductibles than younger women. However, men's choices declined and costs rose with age.
If women tried to minimize the risk of high out-of-pocket costs by finding plans with low deductibles--comparable to those prevailing in the group market and in federal employee plans ($250 or less)--they would only face steeper premiums. In general, low-deductible plans had premiums more than double a $1,000 tax credit.
Women in poor health, or those with even a minor health condition, could face still higher premiums and fewer options.
The authors point out that women, on average, have greater health needs over a lifetime than men, including the need for preventive services and care during pregnancies and childbirth. Moreover, the population of uninsured women is growing and could surpass uninsured men for the first time in 2005.
Facts and Figures
- The median premiums for low-deductible plans were $2,016 for 25-year-old women, $2,448 for 35-year-old women, and $3,548 for 50-year-old women.
- Flat-rate tax credits of $1,000 or $1,500 would buy substantially different benefits for women of the same age with the same health characteristics living in different parts of the country.
- In the only two markets in which women at age 50 could find an individual plan with a $1,000 premium, deductibles were $5,000 and $10,000.
