Making Health Care More Affordable Through Health Insurance Finance Reform
Biases In The Federal Tax Code Hamper Equity And Efficiency
By Katherine Baicker
Katherine Baicker has been a Member of the Council of Economic Advisers since 2005. She is an associate professor in the department of public policy at the School of Public Affairs at UCLA and a research associate at the National Bureau of Economic Research in the public economics program. From 2001- 2002, she served as a senior economist at the Council of Economic Advisers. She has served on the faculties of Dartmouth College, Dartmouth Medical School, and the University of Chicago. She received her B.A. in economics from Yale in 1993 and her Ph.D. in economics from Harvard in 1998.
The way that we finance health insurance today is both unfair and inefficient. The tax code subsidizes the most expensive employment-based policies while penalizing those who buy insurance on their own or choose more basic policies. By reforming this system, we can both make health care more affordable for millions of people and get higher-value care for the money that we spend. These reforms should be coupled with policies to ensure that basic private insurance is affordable for everyone, including those with chronic health conditions or low income, and to ensure that patients and physicians have the tools that they need to make well-informed decisions.
This paper was originally presented as a keynote address at NABE’sWashington Economic Policy Conference, March 12, 2007. Wachovia Bank, N.A., sponsored the session.