This paper was prepared for "Strategies to Expand Health Insurance for Working Americans: A Report Series from The Commonwealth Fund Task Force on the Future of Health Insurance."

A health insurance tax credit could help many people who cannot afford to purchase coverage. However, even with these subsidies, many of the uninsured would probably still find non-group private insurance too expensive. Many would also find the complexities of the individual market and its myriad insurance products bewildering. Private purchasing pools for tax-credit recipients could address these problems by providing individual purchasers with many of the advantages of a group market, such as relatively low administrative costs, no health rating and professional purchasing expertise. Insurance purchasing purchased through pools should cost five percent to ten percent less than private, non-group insurance. Unlike many employer plans, however, purchasing pools will allow individuals to choose among several health plans.