California recently applied for a waiver of federal State Children's Health Insurance Program (SCHIP) requirements that would allow it to expand Healthy Families, its insurance program for low-income children, to parents. This paper explores the implications of expanding Healthy Families for marginal tax rates and marriage penalties and bonuses. The authors use a model of California tax and transfer programs to analyze the impact of the proposed expansion on the work and marriage incentives of several prototypical families. They also discuss tradeoffs associated with program expansion and examined a few alternative designs based on higher income limits and different premium structures. (Published by the Medi-Cal Policy Institute; 2001 September.)
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