This paper examines the data on health insurance coverage and discusses trends in coverage. It considers the problems in the health insurance market and their implications on the nature and scope of government intervention. It uses the Urban Institute's Transfer Income Model (TRIM) to show who gains from the current tax exclusion, and examines the mismatch between current subsidy schemes and the problems in the health insurance market that an ideal subsidy might mitigate. Using TRIM, we simulate the effects of illustrative tax subsidy proposals on the distribution of tax benefits and discuss the effectiveness of those proposals at addressing health insurance market failures.