think an insurance tax credit will go to polcyholders only? then you don't understand markets.

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the "pro-business" side has always argued against raising taxes on companies because they'd only just pass that extra cost along to the customer. naturally, that's not completely true, or else they wouldn't be arguing against the proposed tax, but it's not completely false either.

the reality is that any tax on a transaction is shared between the participants. maybe 50-50, maybe 80-20, but somehow it is shared. it's never 100-0. if the market is stable at one price equilibrium, then a tax causes the demand curve to pull back resulting in a new equilibrium price that results in fewer goods cleared at a lower nominal price but a higher all-in price. buyers pay more, but sellers earn less, so the cost of the tax is shared.

same works for tax credits in reverse. they're shared. if insurance becomes effectively cheaper, that pushes the demand curve out. more insurance will clear the market, but at a higher equilibrium price.

in short, without meaningful pricing restrictions on policies, the insurance companies will raise prices to grab whatever portion of the tax credit they can.

to make matters worse, the relatively small tax credit will only affect people who are relatively indifferent to insurance at current prices. that is, only people who are swayed by just a few hundred dollars will change their minds and finally get insurance. the insurance companies are not indifferent to this money at all, though, so they will take full advantage.


there are a number of rotten practices that would come to an end with passage of any of the bills being contemplated, but one thing is certain: without meaningful restrictions on premiums, we all will face MUCH higher premiums in the future, and any such bill passed will only increase that problem.