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How to Make Tax Credits for Health Insurance Work:

The Role of Purchasing Pools

pdf Tuesday, April 10, 2001
9:00 A.M.-12 Noon
Continental Breakfast at 8:30 A.M.
Marriott at Metro Center
Salon A

Conference Participants

Overview and Presentation of Research Findings
  • The Role of Purchasing Pools in Tax Credit Policy

Sally Trude, Senior Researcher
Center for Studying Health System Change

Panel Discussion about Issues and Policy Responses
  • Expectations for Purchasing Pools: The Role of State and Federal Government and Interaction with Employer-Sponsored Coverage and Public Programs

John M. Bertko, Vice President and Chief Actuary

Stuart M. Butler, Vice President
The Heritage Foundation

Richard E. Curtis, President
Institute for Health Policy Solutions

Mark A. Hall, Professor of Law and Public Health
Wake Forest University

John McManus, Majority Staff Director
House Ways & Means Health Subcommittee

Philip J. Vogel, Senior Vice President
Connecticut Business & Industry Association


Paul B. Ginsburg, President
Center for Studying Health System Change

With the Bush administration’s $1.6 trillion tax cut proposal already on the table, many people believe that significant tax legislation has a real chance of passing Congress this year. Both Congressional Republicans and Democrats have warmed to the idea of using tax credits and private markets to help expand health insurance coverage to the estimated 43 million uninsured Americans. But tax credits alone may not make much of a dent in the ranks of the uninsured without substantial reforms to the small group and individual health insurance markets. Without market reforms, proponents contend, tax credits will do little to make coverage affordable. As an alternative, tax credit legislation could include provisions to encourage the creation of purchasing pools, allowing individuals and small groups to gain the advantages available to larger groups by spreading risk over a larger population. The payoff might be lower costs and more choice for individuals and small employers purchasing insurance with tax credits.

The Center for Studying Health System Change (HSC) is hosting this conference to examine how purchasing pools might enhance the effectiveness of health insurance tax credits. Drawing on HSC research on small-employer purchasing pools, experts will assess the advantages and disadvantages of including provisions to encourage purchasing pools in possible tax credit legislation.

Overview Presentation. HSC Senior Researcher Sally Trude will provide an overview of the potential role of purchasing pools in tax credit policy. She will present HSC and other research findings to provide context for a panel discussion about the kinds of policy interventions and market responses needed to make tax credits and purchasing pools work.

Panel Discussion. A diverse panel of experts will discuss the role of purchasing pools in tax credit policy, weighing the potential advantages and disadvantages and considering what kinds of individuals and organizations would likely benefit and why. Panelists will discuss the role—and reaction—of insurers and brokers/agents and the implications for other purchasing entities in the market. Key issues related to creating or dissolving risk pools also will be covered. Each of the sessions will be followed by a question-and-answer period.

Questions Addressed Include:

  • Would tax credits lead to significantly lower premiums and more choice by increasing the number of persons in the individual and small group markets? Why are premiums in these markets considerably higher than those for larger employers, and why is choice of plans more limited? Could purchasing pools help reform the individual and small group markets?
  • What provisions could be added to tax credit legislation to make purchasing pools feasible? Do the benefits outweigh the costs? How would the provisions relate to state policy? Where would oversight of such pools reside? How much would premiums be allowed to vary, and how much choice would be required? How might purchasing pools coordinate tax credits with contributions from employers and/or public subsidies?
  • How might the market and insurers respond to purchasing pools? What kinds of individuals would view purchasing pools as attractive and why, and who would still not be likely to join and why? What is the optimal number of purchasing pools in a given market?


How to Make Tax Credits for Health Insurance Work: The Role of Purchasing Pools

Conference Transcript

Tax Credits and Purchasing Pools: Will This Marriage Work?

Issue Brief No. 36


Access to Care


Insurance Coverage & Costs


Insured People


Quality and Care Delivery


Quality Imporvement and Measurement



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