Expanding access and choice for health care consumers through tax reform

A refundable tax credit for the uninsured would complement the existing job -based health insurance system while letting people keep their job-based co verage if they wish. Among the wide variety of design options for a tax cre dit, policy and political analysis does not reveal an obvious choice, but a tax credit based on a percentage of spending may have a slight advantage. Congress should give states maximum flexibility to use existing funding sou rces to supplement the value of a federal tax credit and encourage the use of techniques to create stable insurance pools.