4 ms·
As far as I can tell, the main advantages of getting health insurance from an employer are 1) the tax deduction and 2) favorable group insurance plans. For 1,
by baddox 7y ago
As far as I can tell, the main advantages of getting health insurance from an employer are 1) the tax deduction and 2) favorable group insurance plans.
For 1, it's just completely insane that all medical expenses aren't automatically tax-deductible. It's silly that it's advantageous to have my employer pay $200 a month for my insurance plan rather than just pay me an extra $200 and let me use that on whatever plan I want.
For 2, that may be a little trickier politically. Group insurance gets more efficient the larger the group, assuming there's a mechanism to prevent adverse selection. So obviously, we want to increase group size. That was one of the claimed justifications for the individual mandate.
- cheald 7y agoIt does seems like an artifact that after-tax premiums aren't always deductible. We already have a model for how to do that in the homeowner's mortgage interest deduction: insurers (banks) report the total of your premiums (mortgage interest) to the IRS, you get to deduct that value from your AGI. If you're paying for insurance with after-tax dollars, you can deduct it as long as you're a) itemizing, and b) have total medical + premium expenses >7.5% of AGI, but given that people who pay for insurance with pre-tax dollars get that benefit regardless of those criteria, it seems like it'd only be sane to relax the rules so that people paying with post-tax dollars get the same break.
- nicoburns 7y agoIsn't 2 a great argument for nationalised healthcare insurance?
- baddox 7y agoAt the bare minimum it could be an argument for a public option, which was initially part of the Obamacare proposal until Lieberman threatened to cooperate with the GOP to block it.
- Ididntdothis 7y agoFor 2 the simple solution is to make the whole country the risk pool.
- baddox 7y agoNot the simplest politically, of course, but yeah, that's one of the primary economic arguments for nationalized health care or at least nationalized health insurance.
- amatecha 7y agoYeah, I keep wondering recently: why does the expenses of a corporation reduce their taxes, but the expenses of a human to stay alive (food, medical) not reduce their income tax?
- perl4ever 7y agoIn the US, we have something called the "standard deduction" which is more practical than everyone tracking things like a corporation that has accountants.