Showing posts with label self-employed health insurance deduction. Show all posts
Showing posts with label self-employed health insurance deduction. Show all posts

Friday, December 23, 2016

The other subsidy for those who buy their own health insurance

Troubled by the high price of unsubsidized health insurance in the individual market, I have wondered for some time what percentage of those who buy their own insurance without benefit of subsidy are self employed and so claim the self-employed health insurance tax deduction.

I needn't have speculated. Back in October, a google search quickly brought me to detailed estimates provided by the IRS. I've written up the upshot over at healthinsurance.org:
In 2014, 4.2 million tax filers took the self-employed health insurance deduction, deducting a total of $28.1 billion from taxable income, according to a yearly estimate published by the IRS. That comes out to about $6,700 per filer, which indicates that a significant number are deducting premiums for more than one person. $6700 is a bit less than what a pair of 40 year-olds would pay for the average silver-level plan offered in the ACA marketplace 2014.

Thursday, August 27, 2015

Which insured Americans get no subsidy whatsoever?

Who are the Americans who get no help from the federal government paying for their health insurance?

The uninsured, of course. Also, those who buy their insurance in the nongroup market (on- or off-exchange) and a) earn too much to qualify for subsidies, and b) are not self-employed.

It's important to recognize that the self-employed do get a subsidy: the self-employment health insurance deduction. If your health insurance costs less than your total self-employed earnings, you can deduct the whole cost from your earnings. A recent study indicates that this deduction takes an average of 22% off the average self-employed tax filer's health insurance bill.

My question: what percentage of buyers in the nongroup market are not subsidy eligible and not self-employed? They are the only insured Americans who get no government aid paying for insurance. Most of them, that is: there is also a medical expense deduction available to any household that spends more than 10% of its Adjusted Gross Income on medical expenses, including insurance. Only expenses over 10% of AGI can be deducted.