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Employer provided health care insurance came about during WW2 because Roosevelt froze wages. Companies discovered they could "raise" wages by paying for the ins
by WalterBright 10mo ago
Employer provided health care insurance came about during WW2 because Roosevelt froze wages. Companies discovered they could "raise" wages by paying for the insurance themselves.
The practice persisted because employer paid health insurance is tax-deductible, while it isn't if a person pays it out of pocket.
The obvious solution is to make it tax-deductible.
- jagged-chisel 10mo agoI don’t see how this addresses the comment you replied to.
- WalterBright 10mo agoI suggested an alternative solution to the one proposed by the comment I replied to.
- jagged-chisel 10mo agoI don’t understand how “make it tax-deductible” is an alternative to “nationalize healthcare so it’s not tied to employment.”
- WalterBright 10mo agoSorry, I don't know how to make it any clearer.
- jagged-chisel 10mo agoIt’s already tax deductible. Just saying “make it tax deductible” doesn’t explain what you mean.
- WalterBright 10mo agoIt's complicated. From google: * You must pay the premiums with after-tax money. * Your total qualified, unreimbursed medical and dental expenses (including premiums and costs like co-pays, deductibles, prescription medications, etc.) must exceed 7.5% of your Adjusted Gross Income (AGI). * You can only deduct the amount of expenses that exceeds this 7.5% threshold. * You must choose to itemize deductions instead of taking the standard deduction. Most taxpayers use the standard deduction as it is often larger than their total itemized deductions.
- jagged-chisel 10mo agoOh, you’re suggesting making health insurance premiums tax deductible for the individual. I agree that’s a step in the right direction.
- zeroonetwothree 10mo agoIt would make insurance less tied to employment without nationalizing it.
- wwweston 10mo agoIt doesn’t. It’s part of a rosary of things people wield to stave off thinking about the topic. You can do other things besides nationalizing all care or insurance, but when you hear people talk about “open up markets to cross state competition”, or “everyone gets an HSA”, or “make insurance tax deductible/it’s fdr’s fault”, it’s rarely about the specific policy, those are liturgical texts / catechisms designed to give the impression of solutions without substance. Tax deductibility is only a very minor reason why most private insurance is employer provided; the much larger reason is that employment is a decent way to get a reasonably distributed group (of people generally healthy enough to work) and that’s one way of getting balanced risk pool if you’re not doing community rating or a societ wide pool.
- Dylan16807 10mo ago> Tax deductibility is only a very minor reason why most private insurance is employer provided; the much larger reason is that employment is a decent way to get a reasonably distributed group From what I saw, the combination of "no exclusions for pre-existing coverage" and "penalty for not having health insurance" worked pretty well to balance the risk pools without nationalized healthcare. I would still like nationalized healthcare, but I think there are other ways to fix the problem at hand of people being dependent on their jobs for healthcare.
- wwweston 10mo agoAbsolutely. I'm a fan of the ACA's patchwork of wonky choices including no pre-existing exclusions and community rating. Additionally the subsidies made it genuinely accessible for most, at least where they made it through attempts to hamstring them. It's been one of the most helpful practically advanced policy achievements of my lifetime, even with all the effort to destroy it (which has recently found new success and may even succeed entirely in the end). Universal insurance could be better, and perhaps the day will even come when the American electorate recognizes priorities like this and candidates who will advance that kind of policy, contrary habits of the past notwithstanding.
- y7 10mo ago> The obvious solution is to make it tax-deductible. Or make employer paid health insurance count as income and therefore not tax-deductible.
- WalterBright 10mo agoTrue. Total employee compensation is around 145% of their salary. The government could tax that extra 45%, but I doubt that would fly politically. Typical accounts of employee compensation only measure wages and salaries. I've only seen the WSJ using total employee compensation, which is a far more realistic figure.
- okasaki 10mo agoThat's how it works in the UK
- deleted 10mo ago[deleted]
- wombatpm 10mo agoOr lower the age for Medicare every year until everyone is covered.
- SpaceNoodled 10mo agoWe could just lower it once, to zero, and be done with it.
- WalterBright 10mo agoWe could. Who is going to pay that bill?
- arcticbull 10mo agoWell you see it would free up a huge amount of money that employers are currently paying to insurers. If you take that money (by raising the Medicare premium on employees), plus the existing medicaid budget, existing medicare tax and payroll tax contributions America's healthcare system would receive over 40% more money to cover care per capita than the next leading contestant. Almost 2X the OECD average. In PPP dollars no less. https://www.healthsystemtracker.org/chart-collection/health-spending-u-s-compare-countries/ https://www.healthsystemtracker.org/chart-collection/health-... "But where would the money come from" is one of the wildest questions to ask about a system that already costs double the average. I'd say, give or take, the same place its coming from now, but like, less.
- 8note 10mo agowould it actually be that different of a bill? i imagine its already doing the most expensive part, treating people who are almost dead who have lots of procedures that could be done. picking up people that need basically no care sounds pretty cheap by comparison
- WalterBright 10mo agoEstimates of Medicare errors, fraud and abuse are around $60 billion. Greatly increasing the scope of it will, inevitably, increase that figure.
- hysan 10mo agoWouldn’t that leave out the set of people who have no income? For example, long term unemployed, adults switching careers and needing to take a long time off for education, etc? While the solution gets close, I don’t think it’s strictly the same thing. Add on top of that our unnecessarily complicated tax system and this sounds even less equivalent.