Abstract
This paper investigates the role of tax subsidies in linking the market for health insurance to the employment relationship. Using both American and Canadian data, it investigates how these subsidies influence whether health insurance coverage is offered in different sized firms and whether it is offered through an employer versus the individual private market. The findings indicate that tax subsidies encourage the provision of insurance in smaller firms. Removal of the subsidies would cause the level of insurance in small firms to decline significantly, but would not cause a large change in the level of insurance in larger firms. Part of this decline would be offset by increases in the market for individually purchased insurance.
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Stabile, M. The Role of Tax Subsidies in the Market for Health Insurance. International Tax and Public Finance 9, 33–50 (2002). https://doi.org/10.1023/A:1014461622779
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DOI: https://doi.org/10.1023/A:1014461622779