Notes 04-01 - Lecture 16: Employer Mandates I. Medicaid and...

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Lecture 16: Employer Mandates I. Medicaid and Tax Credits a. Medicaid Expansions i. Take Up – Some eligible people don’t sign up ii. Crowd-out – people might be dropping their private insurance to take up Medicaid 1. Increases the cost per newly insured; may increase uninsured adults 2. #’s: from ’84-’92: Medicaid expands a. + 1.5M new Medicaid beneficiaries b. Only 0.9M previously uninsured c. 0.4M increase in newly uninsured adults d. only 0.5M decrease in # uninsured b. Tax Credits i. How does US tax system subsidize health insurance? 1. Tax deduction to employee for health insurance a. $10k in wages becomes $7.5k spending money b. $10k in health insurance is $10k worth of health insurance 2. What if your employer doesn’t offer insurance? a. No benefit; have to buy insurance with post-tax $ 3. US spends $140B on this tax break 4. Who benefits most from this policy? a. Rich people i. They’re in higher tax brackets (are taxed at a higher percentage) ii. Pretax $’s are then a bigger deal
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This note was uploaded on 04/10/2008 for the course ECON 232 taught by Professor Coile during the Spring '08 term at Wellesley College.

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Notes 04-01 - Lecture 16: Employer Mandates I. Medicaid and...

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