Explain the effect of Federal tax policy on the cost of health insurance.

Expert Solution

Federal Tax Policy has a positive effect on the cost of health insurance policies. The affordable care act made various changes in the tax policy of the country in order to make health care policies affordable and comprehensive. The objective was to make health care affordable, comprehensive by increasing coverage and financing reforms.

For reducing the cost of health insurance first it levied charges on those who do not have adequate insurance, levied charges on employers also who do not provide for health care. Thus made not having health insurance expensive. Other steps like levying excise tax on high cost health insurance policies made the policies cheaper also the amount collected by such taxes were used for reforms. It also increased taxes on high income families. To give further boost more tax credit was given for spending on health care insurance.

Rahul Sunny answered 2 years ago

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