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HEALTH INSURANCE TAX CREDITS, THE EARNED INCOME TAX CREDIT, AND HEALTH INSURANCE COVERAGE OF SINGLE MOTHERS
Author(s) -
Cebi Merve,
Woodbury Stephen A.
Publication year - 2014
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.2928
Subject(s) - earned income tax credit , tax credit , current population survey , health insurance , economics , labour economics , demographic economics , population , actuarial science , business , public economics , health care , economic growth , environmental health , medicine
SUMMARY The Omnibus Budget Reconciliation Act of 1990 enacted a refundable tax credit for low‐income working families who purchased health insurance coverage for their children. This health insurance tax credit (HITC) existed during tax years 1991, 1992, and 1993, and was then rescinded. A difference‐in‐differences estimator applied to Current Population Survey data suggests that adoption of the HITC, along with accompanying increases in the Earned Income Tax Credit (EITC), was associated with a relative increase of about 4.7 percentage points in the private health insurance coverage of working single mothers with high school or less education. Also, a difference‐in‐difference‐in‐differences estimator, which attempts to net out the possible influence of the EITC increases but which requires strong assumptions, suggests that the HITC was responsible for about three‐quarters (3.6 percentage points) of the total increase. The latter estimate implies a price elasticity of health insurance take‐up of −0.42. Copyright © 2013 John Wiley & Sons, Ltd.