Reforming the U.S. Health Care System

Policy Backgrounders | Health

No. 149
Monday, April 26, 1999
by John C. Goodman & Merrill Matthews

VII. Options For The Self-Employed

A. Giving The Self-Employed A New Option: Taking A Tax Deduction For The Purchase Of Health Insurance Or Claiming A Tax Credit

  1. Currently, the self-employed get a partial deduction for the purchase of health insurance, and eventually they will get a 100 percent deduction.
  2. As an alternative, this plan allows the self-employed to take a tax credit.

B. Allowing The Self-Employed Who Claim A Tax Credit To Make Roth MSA Contributions

  1. Under the current system, the self-employed may contribute to a conventional MSA, provided they have catastrophic insurance.
  2. Under this plan, the self-employed who elect the tax credit will be able to make deposits to a Roth MSA instead.
  3. They will be allowed to contribute to either a conventional MSA or a Roth MSA, but not both during the insurance period.

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