Tax credits and purchasing pools: will this marriage work?

Bipartisan interest is growing in Congress for using federal tax credits to help low-income families buy health insurance. Regardless of the approach taken, tax credit policies must address risk selection issues to ensure coverage for the chronically ill. Proposals that link tax credits to purchasing pools would avoid risk selection by grouping risks similar to the way large employers do. Voluntary purchasing pools have had only limited success, however. This Issue Brief discusses linking tax credits to purchasing pools. It uses information from the Center for Studying Health System Change's (HSC) site visits to 12 communities as well as other research to assess the role of purchasing pools nationwide and the key issues and implications of linking tax credits and pools.