Evaluating Effects of Tax Preferences on Health Care Spending and Federal Revenues

John F. Cogan, R. Glenn Hubbard, Daniel P. Kessler

NBER Working Paper No. 12733
Issued in December 2006
NBER Program(s):Health Care, Public Economics

In this paper, we calculate the consequences for health spending and federal revenues of an above-the-line deduction for out-of-pocket health spending. We show how the response of spending to this expansion in the tax preference can be specified as a function of a small number of behavioral parameters that have been estimated in the existing literature. We compare our estimates to those from other researchers. And, we use our analysis to derive some implications for tax policy toward HSAs.

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w12733

Published:

• Poterba, J.M. (ed.) Tax Policy and the Economy, volume 21. Cambridge: MIT Press, 2007.
• Evaluating Effects of Tax Preferences on Health Care Spending and Federal Revenues, John F. Cogan, R. Glenn Hubbard, Daniel P. Kessler. in Tax Policy and the Economy, Volume 21, Poterba. 2007