From Ezra Klein, a look at how even employer-provided health insurance is heavily subsidized by the government:
"Most of the people who have health-care insurance and don’t get it from Medicare, Medicaid or the military/veteran’s systems are getting it from their employer. And the reason they’re getting it from their employer is that health-care benefits — unlike wages — are tax deductible. That ends up being a huge subsidy for people who get health care through their employers. Between 2010 and 2014, the Joint Committee on Taxation estimates that this break will cost the Treasury about $660 billion. It’s the single most expensive tax expenditure in the entire tax code.
So let’s say you eliminated it tomorrow. Poof, gone. The day after that, tens of millions would lose their health-care benefits, as the only thing that makes those benefits affordable for employers is that tax break. So I’d suggest that those Americans also have a form of government-provided health care. But because we’ve hidden their subsidy in a way we haven’t hidden Medicare or Medicad, they get to continue thinking that they’re the sort of hardworking folks who get no benefits from the government and instead get taxed to support all these old and poor people. In reality, they’re getting a massive tax break that’s being paid for by the uninsured, the unemployed, the self-employed, and people whose employers don’t offer health-care insurance."
Whether you are for or against this subsidy, I think that this is a prime example of how taxes can alter behavior through incentives. If it weren't for the tax deductibility of employer provided health insurance, we wouldn't be as likely to have it. If we didn't have it, perhaps more Americans from both sides of the political aisle would see Medicare and think, "Why do seniors get health care like that and I don't?" Or, perhaps
those suggesting a move towards a voucher-based Medicare system would be confirmed in their beliefs that people would search out more cost-effective health care. While I assume the former is more likely than the latter (simply because Medicare has already proven to be so popular and it's hard to find "cheap" solutions to things like cancer), it would be interesting to see how the American people reacted to such a change to a system they probably didn't even realized affected them,
"Most of the people who have health-care insurance and don’t get it from Medicare, Medicaid or the military/veteran’s systems are getting it from their employer. And the reason they’re getting it from their employer is that health-care benefits — unlike wages — are tax deductible. That ends up being a huge subsidy for people who get health care through their employers. Between 2010 and 2014, the Joint Committee on Taxation estimates that this break will cost the Treasury about $660 billion. It’s the single most expensive tax expenditure in the entire tax code.
So let’s say you eliminated it tomorrow. Poof, gone. The day after that, tens of millions would lose their health-care benefits, as the only thing that makes those benefits affordable for employers is that tax break. So I’d suggest that those Americans also have a form of government-provided health care. But because we’ve hidden their subsidy in a way we haven’t hidden Medicare or Medicad, they get to continue thinking that they’re the sort of hardworking folks who get no benefits from the government and instead get taxed to support all these old and poor people. In reality, they’re getting a massive tax break that’s being paid for by the uninsured, the unemployed, the self-employed, and people whose employers don’t offer health-care insurance."
Whether you are for or against this subsidy, I think that this is a prime example of how taxes can alter behavior through incentives. If it weren't for the tax deductibility of employer provided health insurance, we wouldn't be as likely to have it. If we didn't have it, perhaps more Americans from both sides of the political aisle would see Medicare and think, "Why do seniors get health care like that and I don't?" Or, perhaps
those suggesting a move towards a voucher-based Medicare system would be confirmed in their beliefs that people would search out more cost-effective health care. While I assume the former is more likely than the latter (simply because Medicare has already proven to be so popular and it's hard to find "cheap" solutions to things like cancer), it would be interesting to see how the American people reacted to such a change to a system they probably didn't even realized affected them,