Tax credits and the affordability of individual health insurance.

As federal policy makers explore using tax credits to help uninsured Americans buy individual health insurance, a key question is whether the credits are large enough to make insurance affordable for those who are older or in less-than-perfect health. A Center for Studying Health System Change (HSC) analysis of two leading proposals--one by President Bush and the other by a bipartisan group of senators--indicates tax credits would make individual coverage affordable for many people but are unlikely to offer much help to those who are older or in imperfect health. For example, nine out of 10 19- to 29-year-olds in excellent health would receive credits covering at least half of the estimated cost of an individual policy, compared with only one in 100 people age 55-64 in poor health.