Do healthcare tax credits help poor-health individuals on low incomes?

Incentives for voluntary health insurance in a national health system: Evidence from Italy

OBJECTIVES

The paper evaluates the extent to which the government's policy to encourage the purchase of voluntary health insurance (VHI) may have led to income-related horizontal inequity in access to health care in a universal health care system (NHS).

METHODS

Ad hoc tax return data for the universe of Italian taxpayers for years 2009-2016 are used to estimate the tax benefits granted to taxpayers who hold VHI, the redistributive impact, and the public budget effect. The income elasticity of tax benefits is estimated using tax return data and considering some taxpayers' characteristics (income class, gender, age, and geographic area). Standard inequality indices are computed to assess income-related horizontal inequity in access to health care.

RESULTS

Tax incentives, especially those granted to employer-paid health insurance, have a sizeable impact on tax revenue and introduce into the Italian NHS significant income-related horizontal and vertical inequity in access to health care. The results suggest a distributional profile of tax incentives that is highly concentrated in favor of wealthier taxpayers.

CONCLUSION

Our analysis adds novel evidence that may contribute to the current debate on whether and to what extent countries in which all citizens have access to free healthcare and equal standards of healthcare services should subsidize VHI, especially when the coverage doubles the healthcare services provided by universal public insurance. We show that VHI reduces tax revenues and introduces disparities among citizens in terms of access to healthcare services.

The effect of income-based policies on mortality inequalities in Scotland: a modelling study

BACKGROUND

The unequal distribution of income is a fundamental determinant of health inequalities. Decision making around economic policies could be enhanced by showing their potential health effects. We used scenario modelling to assess the effects of 12 income-based policies on years of life lost (YLL) and inequalities in YLL in Scotland for the 2017-21 period.

METHODS

In this modelling study, we used EUROMOD version H1.0+, a tax-benefit microsimulation model, to estimate the effects of hypothetical fiscal policies on household income for Scottish households in the 2014/15 Family Resources Survey (n=2871). The effects were modelled excluding housing costs. Income change from baseline was estimated for each quintile of the 2016 Scottish Index of Multiple Deprivation (SIMD) after weighting to account for differential non-response to the Family Resources Survey, and incomes were equivalised according to the Organisation for Economic Co-operation and Development's modified equivalence scale. A regression analysis of cross-sectional data was used to estimate the relationship between income change and all-cause mortality, followed up by a sensitivity analysis to account for uncertainties around the assumptions on effect size. Informing Interventions to reduce health Inequalities (Triple I), a health inequalities scenario modelling tool, was used to estimate policy effects on YLL and government spending after five years of theoretical implementation. The Triple I model used population estimates for 2016 stratified by sex, 5-year age group, and SIMD quintile, which were obtained from the National Records of Scotland. Preliminary estimates of relative policy costs were calculated from the EUROMOD-derived combined effects of each policy on tax bills, National Insurance contributions, and benefits receipts for Scottish households.

FINDINGS

Taxation-based policies did not substantially affect household incomes, whereas benefits-based policies had large effects across the quintiles. The best policy for improving health and narrowing health inequalities was a 50% increase to means-tested benefits (approximately 105 177 [4·7%] YLL fewer than the baseline of 2·2 million, and a 7·9% reduction in relative index of inequality). Effects on YLL and health inequalities were inversely correlated in response to changes in taxation policy. Citizen's Basic Income (CBI) schemes also substantially narrowed inequalities (3·7% relative index of inequality for basic scheme, 5·9% for CBI with additional payments for individuals with disability), and modestly reduced YLL (0·7% for the basic scheme and 1·4% with additional payments). The estimated government spending associated with a policy was proportional to its effect on YLL, but less closely related to its effect on inequalities in YLL.

INTERPRETATION

Policies that affect incomes could potentially have marked effects on health and health inequalities in Scotland. Our projections suggest that the most effective policies for reducing health inequalities appeared to be those that disproportionately increased incomes in the most deprived areas. Although modelling was subject to various assumptions, the approach can be useful to inform decisions around addressing the upstream determinants of health inequalities.

FUNDING

None.

Rich and Well Educated: Are These Requirements Necessary to Claim Healthcare Tax Credits in Italy?

BACKGROUND

The paper investigates the use of healthcare tax credits (HTCs) in Italy through the analysis of a panel data, which provides information on individual income tax from 2008 to 2014. There is evidence of disparities in the per-capita HTCs between Northern and Southern regions, which need to be analyzed and addressed.

OBJECTIVE

The aim of the paper is to investigate the socioeconomic determinants in the use of Healthcare Tax Credits in Italy.

METHODS

A fixed effects Ordinary Least Square model is run to analyze the impact of selected socioeconomic variables on regional per capita HTCs, with a particular focus on the role of education.

RESULTS

The results corroborate literature findings on the regressive effects of HTCs; they also provide highlights on the role of education in explaining the distribution of HTCs among Italian regions.

CONCLUSION

Public money is reimbursed to regions where people are, on average, richer and better educated. More equitable objectives could be reached by allocating the same resources in the provision of services covered by the NHS.