Private Health Insurance: Estimates of Expanded Tax Deductibility of Premiums forIndividually Purchased Health Insurance

摘要

This letter responds to your request for information on the potential tax benefitthat individuals without employment-based health coverage would receive if the cost of their individually purchased health insurance were fully deductible from their federal income taxes. You also asked for information on the characteristics of the nonelderly population by their federal marginal tax bracket and health insurance status. As you know, under current law some self-employed individuals can deduct 45 percent of health insurance expenses. In addition, any individual can deduct health insurance premiums to the extent that they and all other medical expenses exceed 7.5 percent of adjusted gross income (AGI). Some congressional proposals would expand the deductibility of health insurance premiums by allowing individuals to fully deduct premiums paid for individually purchased health coverage.