Abstract
The high level of ininsurance in the United States is due in large measure to the tax treatment of health care, which is based on the tax exclusion for company-provided plans. Correcting the perverse incentives for providers and patients resulting from this tax treatment is the crucial step to creating a national health care system that is affordable and efficient. The Heritage Foundation proposal calls for the elimination of the current tax exclusion and its replacement with a system of refundable tax credits for the purchase of health insurance and medical services.
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