Forum Session

Retooling Tax Subsidies for Health Coverage: Old Ideas, New Politics
November 12, 1998


Karl Polzer


This Forum session examined the tax treatment of health coverage and health care spending and explored the potential impact of recent tax reform proposals. A group of experts discussed the effects of proposals that would (a) limit the open-ended tax exclusion of health benefits provided by employers and unions, (b) retarget tax subsidies from higher earners to lower earners, and (c) remove the tax code's bias toward employment-based coverage and create at least an equal tax incentive for the purchase of individual coverage. Special attention was paid to the role that employers and unions play in organizing coverage, how that role might be maintained if the tax system were altered to make the system more efficient and equitable, and what elements of the health care system might have to be recreated if employment-based coverage declined in favor of individual-based coverage.


Bob Lyke, Specialist in Social Legislation, Congressional Research Service; Mark V. Pauly, Chair and Professor, Health Care Systems Department, Wharton School, University of Pennsylvania; C. Eugene Steuerle, Senior Fellow, Urban Institute; Harry J. Conaway, Head, Washington Resource Group, William M. Mercer, Inc.; Sonia Conly, Financial Economist, Department of the Treasury; John K. Meagher, Special Counsel, House Committee on Ways and Means; James S. Ray, Partner, Connerton & Ray

Related Materials

More information available in the accompanying publication, Issue Brief No. 728.

See also Expanding Health Coverage for the Uninsured: Fundamentals of the Tax Credit Option (Background Paper, August 2002).

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