| . | US-HI . | UPHI . | UPHI . | UPHI . | ||||
|---|---|---|---|---|---|---|---|---|
| . | . | . | |$\overset{\text{Full}}{\overbrace{\rho ^{\textit {UPHI}}=0.0}}$| . | |$\overset{\text{Partial}}{\overbrace{\rho ^{\textit {UPHI}}=0.30}}$| . | |$\overset{\text{Null}}{\overbrace{\rho ^{\textit {UPHI}}=1.0}}$| . | |||
| . | (1) . | (2) . | (3) . | (4) . | (5) . | (6) . | (7) . | (8) . |
| . | Benchmark . | HIU . | Benchmark . | HIU . | Benchmark . | HIU . | Benchmark . | HIU . |
| Output (GDP) | 93.36 | 93.45 | 85.86 | 85.25 | 95.12 | 91.66 | 107.24 | 108.24 |
| Capital (K) | 90.77 | 90.76 | 74.72 | 73.30 | 90.54 | 85.82 | 115.16 | 117.45 |
| Non-medical consumption (C) | 93.25 | 93.42 | 87.97 | 88.28 | 95.74 | 92.56 | 104.97 | 105.85 |
| Suits index (income tax) | 0.218 | 0.220 | 0.004 | 0.004 | 0.070 | 0.109 | 0.415 | 0.464 |
| Optimal tax progressivity (τ*) | 0.113 | 0.113 | 0.003 | 0.004 | 0.039 | 0.071 | 0.155 | 0.178 |
| Scaling parameter (λ) | 1.277 | 1.277 | 0.710 | 0.713 | 0.900 | 1.015 | 1.646 | 1.821 |
| Tax break threshold | |${\$}$|8,810 | |${\$}$|8,810 | |${\$}$|1 | |${\$}$|0 | |${\$}$|201 | |${\$}$|1,402 | |${\$}$|25,226 | |${\$}$|28,830 |
| Welfare (CEV in %): | +0.102 | +0.137 | −7.411 | −6.588 | −1.837 | −1.581 | −5.051 | −6.272 |
| . | US-HI . | UPHI . | UPHI . | UPHI . | ||||
|---|---|---|---|---|---|---|---|---|
| . | . | . | |$\overset{\text{Full}}{\overbrace{\rho ^{\textit {UPHI}}=0.0}}$| . | |$\overset{\text{Partial}}{\overbrace{\rho ^{\textit {UPHI}}=0.30}}$| . | |$\overset{\text{Null}}{\overbrace{\rho ^{\textit {UPHI}}=1.0}}$| . | |||
| . | (1) . | (2) . | (3) . | (4) . | (5) . | (6) . | (7) . | (8) . |
| . | Benchmark . | HIU . | Benchmark . | HIU . | Benchmark . | HIU . | Benchmark . | HIU . |
| Output (GDP) | 93.36 | 93.45 | 85.86 | 85.25 | 95.12 | 91.66 | 107.24 | 108.24 |
| Capital (K) | 90.77 | 90.76 | 74.72 | 73.30 | 90.54 | 85.82 | 115.16 | 117.45 |
| Non-medical consumption (C) | 93.25 | 93.42 | 87.97 | 88.28 | 95.74 | 92.56 | 104.97 | 105.85 |
| Suits index (income tax) | 0.218 | 0.220 | 0.004 | 0.004 | 0.070 | 0.109 | 0.415 | 0.464 |
| Optimal tax progressivity (τ*) | 0.113 | 0.113 | 0.003 | 0.004 | 0.039 | 0.071 | 0.155 | 0.178 |
| Scaling parameter (λ) | 1.277 | 1.277 | 0.710 | 0.713 | 0.900 | 1.015 | 1.646 | 1.821 |
| Tax break threshold | |${\$}$|8,810 | |${\$}$|8,810 | |${\$}$|1 | |${\$}$|0 | |${\$}$|201 | |${\$}$|1,402 | |${\$}$|25,226 | |${\$}$|28,830 |
| Welfare (CEV in %): | +0.102 | +0.137 | −7.411 | −6.588 | −1.837 | −1.581 | −5.051 | −6.272 |
Notes: Similarly to De Nardi, French, and Jones (2010), health acts as a preference shifter in the HIU (health-in-utiliity) model. Columns (1) and (2) show steady-state results for a welfare maximizing progressive tax system with the US health insurance system in place. Column (1) is the benchmark model and column (2) shows the HIU version of the model. Columns (3) and (4) compare the optimal tax progressivity results for the benchmark model and the HIU model with a UPHI system that fully insures all health expenditure shocks, that is, the coinsurance rate is zero. Columns (5) and (6) compare the optimal progressivity outcome for a model with Medicare-for-all in place, that is, a UPHI with a coinsurance rate of 30%. Finally, columns (6) and (7) compare the optimal progressivity outcome for a model without health insurance, that is, a UPHI with a coinsurance rate of 100%. All private insurance arrangements are turned-off in the UPHI models. GDP, capital, non-medical consumption, and welfare are normalized using either the benchmark model with health risk or the recalibrated benchmark of the HIU model. Each column presents steady-state results. CEV values are reported as percentage changes in terms of lifetime consumption of a newborn individual with respect to consumption levels in the benchmark.
| . | US-HI . | UPHI . | UPHI . | UPHI . | ||||
|---|---|---|---|---|---|---|---|---|
| . | . | . | |$\overset{\text{Full}}{\overbrace{\rho ^{\textit {UPHI}}=0.0}}$| . | |$\overset{\text{Partial}}{\overbrace{\rho ^{\textit {UPHI}}=0.30}}$| . | |$\overset{\text{Null}}{\overbrace{\rho ^{\textit {UPHI}}=1.0}}$| . | |||
| . | (1) . | (2) . | (3) . | (4) . | (5) . | (6) . | (7) . | (8) . |
| . | Benchmark . | HIU . | Benchmark . | HIU . | Benchmark . | HIU . | Benchmark . | HIU . |
| Output (GDP) | 93.36 | 93.45 | 85.86 | 85.25 | 95.12 | 91.66 | 107.24 | 108.24 |
| Capital (K) | 90.77 | 90.76 | 74.72 | 73.30 | 90.54 | 85.82 | 115.16 | 117.45 |
| Non-medical consumption (C) | 93.25 | 93.42 | 87.97 | 88.28 | 95.74 | 92.56 | 104.97 | 105.85 |
| Suits index (income tax) | 0.218 | 0.220 | 0.004 | 0.004 | 0.070 | 0.109 | 0.415 | 0.464 |
| Optimal tax progressivity (τ*) | 0.113 | 0.113 | 0.003 | 0.004 | 0.039 | 0.071 | 0.155 | 0.178 |
| Scaling parameter (λ) | 1.277 | 1.277 | 0.710 | 0.713 | 0.900 | 1.015 | 1.646 | 1.821 |
| Tax break threshold | |${\$}$|8,810 | |${\$}$|8,810 | |${\$}$|1 | |${\$}$|0 | |${\$}$|201 | |${\$}$|1,402 | |${\$}$|25,226 | |${\$}$|28,830 |
| Welfare (CEV in %): | +0.102 | +0.137 | −7.411 | −6.588 | −1.837 | −1.581 | −5.051 | −6.272 |
| . | US-HI . | UPHI . | UPHI . | UPHI . | ||||
|---|---|---|---|---|---|---|---|---|
| . | . | . | |$\overset{\text{Full}}{\overbrace{\rho ^{\textit {UPHI}}=0.0}}$| . | |$\overset{\text{Partial}}{\overbrace{\rho ^{\textit {UPHI}}=0.30}}$| . | |$\overset{\text{Null}}{\overbrace{\rho ^{\textit {UPHI}}=1.0}}$| . | |||
| . | (1) . | (2) . | (3) . | (4) . | (5) . | (6) . | (7) . | (8) . |
| . | Benchmark . | HIU . | Benchmark . | HIU . | Benchmark . | HIU . | Benchmark . | HIU . |
| Output (GDP) | 93.36 | 93.45 | 85.86 | 85.25 | 95.12 | 91.66 | 107.24 | 108.24 |
| Capital (K) | 90.77 | 90.76 | 74.72 | 73.30 | 90.54 | 85.82 | 115.16 | 117.45 |
| Non-medical consumption (C) | 93.25 | 93.42 | 87.97 | 88.28 | 95.74 | 92.56 | 104.97 | 105.85 |
| Suits index (income tax) | 0.218 | 0.220 | 0.004 | 0.004 | 0.070 | 0.109 | 0.415 | 0.464 |
| Optimal tax progressivity (τ*) | 0.113 | 0.113 | 0.003 | 0.004 | 0.039 | 0.071 | 0.155 | 0.178 |
| Scaling parameter (λ) | 1.277 | 1.277 | 0.710 | 0.713 | 0.900 | 1.015 | 1.646 | 1.821 |
| Tax break threshold | |${\$}$|8,810 | |${\$}$|8,810 | |${\$}$|1 | |${\$}$|0 | |${\$}$|201 | |${\$}$|1,402 | |${\$}$|25,226 | |${\$}$|28,830 |
| Welfare (CEV in %): | +0.102 | +0.137 | −7.411 | −6.588 | −1.837 | −1.581 | −5.051 | −6.272 |
Notes: Similarly to De Nardi, French, and Jones (2010), health acts as a preference shifter in the HIU (health-in-utiliity) model. Columns (1) and (2) show steady-state results for a welfare maximizing progressive tax system with the US health insurance system in place. Column (1) is the benchmark model and column (2) shows the HIU version of the model. Columns (3) and (4) compare the optimal tax progressivity results for the benchmark model and the HIU model with a UPHI system that fully insures all health expenditure shocks, that is, the coinsurance rate is zero. Columns (5) and (6) compare the optimal progressivity outcome for a model with Medicare-for-all in place, that is, a UPHI with a coinsurance rate of 30%. Finally, columns (6) and (7) compare the optimal progressivity outcome for a model without health insurance, that is, a UPHI with a coinsurance rate of 100%. All private insurance arrangements are turned-off in the UPHI models. GDP, capital, non-medical consumption, and welfare are normalized using either the benchmark model with health risk or the recalibrated benchmark of the HIU model. Each column presents steady-state results. CEV values are reported as percentage changes in terms of lifetime consumption of a newborn individual with respect to consumption levels in the benchmark.
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