4 ms·

One of the problems with US health insurance is that it is tax deductible only when "paid" by the employer. Making it deductible by everyone would help. The ar

by casca 14y ago

One of the problems with US health insurance is that it is tax deductible only when "paid" by the employer. Making it deductible by everyone would help. The article does not account for the difficulty of shopping around. If you have the time to travel then it's possible, but often medical care has some urgency so you need to use the closest service provider. If this really is a trend then the best result would be for people to start taking out catastrophic health insurance. The idea is that they would be insured for very large and very unusual events and cover the routine payments by paying cash.

yummyfajitas 14y ago
Making it deductible by everyone would help. As would taxing it no matter who pays. I can't see any good reason why health insurance should be tax deductible - it's a private good with minimal external benefits.
- Spooky23 14y ago
  Huh? Say you're a parent. You have a house and three kids. Your spouse makes alot less than you do. Then you get afflicted with a chronic disease like MS. Without healthcare, you eventually cannot perform at work and get fired or laid off. You have some sort of episode, and end up in the ER. You can't pay your mortgage, and you cannot replace your income. So you stop paying the mortgage and go on food stamps. Then your house gets foreclosed. Next, your spouse leaves you and takes the kids. You're indigent, your kids are now on Medicaid (at taxpayer expense) and getting assistance for housing. You're behind on child support because your disability case was rejected and your appealing it. If you add up the costs, you'll find that the cost of providing deductiblity is lower than the costs of all of the other outcomes. Actually, a year of healthcare probably costs less than that 1 ER visit.
  - jonknee 14y ago
    There are a lot of things that are required in life and that are not deductible. Right now the deduction increases prices and makes changing jobs a lot more risky / a pain. Also, corporate write-offs for health insurance benefits has nothing to do with what happens to your healthcare when you get laid off. If anything not having it be deductible would help because then you're insurance has no reason to be tied to your employment so you could just pay for it yourself like you do anything else. What would fix your scenario is universal healthcare.
  - yummyfajitas 14y ago
    Say you're a parent, and you work at a job which requires you to wear pants. Without pants, you cannot perform at work and get fired or laid off. [Insert rest of your sad story here.] Therefore, purchasing pants should be tax deductible.
- khuey 14y ago
  You don't see an external benefit in encouraging people to buy healthcare so that society doesn't have to pay for it later (via Medicare or the emergency room)?
eurleif 14y ago
>One of the problems with US health insurance is that it is tax deductible only when "paid" by the employer. This page (which was the first Google result) disagrees. http://taxes.about.com/od/deductionscredits/qt/healthinsurance.htm http://taxes.about.com/od/deductionscredits/qt/healthinsuran...
- fiatmoney 14y ago
  "you cannot deduct any insurance costs for any months you were eligible to participate in a subsidized group health insurance plan through your or your spouse's employer"
- fr0sty 14y ago
  No it doesn't. If I work for a company that does not provide health benefits any health insurance I buy is NOT deductible. and that is one of the many odd decisions made. If you are self-employed (which is what the linked page is about) you are both the employer and employee and you as the employer of yourself get the decuction. People working for "the man" don't get this luxury.
  - eurleif 14y ago
    >If you are self-employed (which is what the linked page is about) you are both the employer and employee and you as the employer of yourself get the decuction. Not entirely true. If you're employed by an S corporation you own, the S corporation is the employer, not you, but you can take the deduction.
mgkimsal 14y ago
It's deductible no matter who pays. I've had a private policy paid for by myself for my family for years. I deduct the cost of that from my taxes. The bigger issue is people generally are accustomed to larger/bigger plan coverage from employers, and employers contribute a portion, skewing the 'real' price. High deductible policies help A LOT, but I fear those are going to be harder to use under Obamacare (for seemingly ridiculous reasons). We're paying $330/month for a high deductible policy with $5k deductible. Would be close to $250/month for a $10k I think. And, I think, that's likely how it should be, vs paying $800-$1000/month for a plan with a low (or no!) deductible. I've had friends say "well, I don't have $10k just sitting around in case there's a medical bill!" A few rebuttals to that mentality: 1. Some of these same people have no issues with financing new cars every few years. 2. You'd have $10k in savings much faster if you were only paying $400/month instead of $1400/month for insurance. 3. We had a big issue a couple years ago, and had an emergency room visit. That was January - we didn't get a bill until April, and it had a number to call to work out a payment plan - you can finance your emergency medical expenses. I realize these numbers don't work out for everyone in all cases, but neither does employer-provided health care.
- fr0sty 14y ago
  > It's deductible no matter who pays. That does not square with this[1]: If you are not self-employed, and you don't work for a company that provides health insurance with a cafeteria plan, the Internal Revenue Service (IRS) allows you to count health and dental insurance premiums as part of the 7.5% of your adjusted gross income that has to be spent on health care before any out-of-pocket medical expenses can be deducted. [1]http://healthinsurance.about.com/b/2010/01/25/are-my-health-insurance-premiums-tax-deductible.htm http://healthinsurance.about.com/b/2010/01/25/are-my-health-...
  - mgkimsal 14y ago
    I am self-employed, as is my wife. Most people I know with a spouse with insurance choose to stay on that instead, but it's often not really a better deal - it's just habit/convenience.
- 14y ago

by casca 14y ago

yummyfajitas 14y ago

Making it deductible by everyone would help. As would taxing it no matter who pays. I can't see any good reason why health insurance should be tax deductible - it's a private good with minimal external benefits.

Spooky23 14y ago
Huh? Say you're a parent. You have a house and three kids. Your spouse makes alot less than you do. Then you get afflicted with a chronic disease like MS. Without healthcare, you eventually cannot perform at work and get fired or laid off. You have some sort of episode, and end up in the ER. You can't pay your mortgage, and you cannot replace your income. So you stop paying the mortgage and go on food stamps. Then your house gets foreclosed. Next, your spouse leaves you and takes the kids. You're indigent, your kids are now on Medicaid (at taxpayer expense) and getting assistance for housing. You're behind on child support because your disability case was rejected and your appealing it. If you add up the costs, you'll find that the cost of providing deductiblity is lower than the costs of all of the other outcomes. Actually, a year of healthcare probably costs less than that 1 ER visit.
- jonknee 14y ago
  There are a lot of things that are required in life and that are not deductible. Right now the deduction increases prices and makes changing jobs a lot more risky / a pain. Also, corporate write-offs for health insurance benefits has nothing to do with what happens to your healthcare when you get laid off. If anything not having it be deductible would help because then you're insurance has no reason to be tied to your employment so you could just pay for it yourself like you do anything else. What would fix your scenario is universal healthcare.
- yummyfajitas 14y ago
  Say you're a parent, and you work at a job which requires you to wear pants. Without pants, you cannot perform at work and get fired or laid off. [Insert rest of your sad story here.] Therefore, purchasing pants should be tax deductible.
khuey 14y ago
You don't see an external benefit in encouraging people to buy healthcare so that society doesn't have to pay for it later (via Medicare or the emergency room)?

eurleif 14y ago

>One of the problems with US health insurance is that it is tax deductible only when "paid" by the employer. This page (which was the first Google result) disagrees. http://taxes.about.com/od/deductionscredits/qt/healthinsurance.htm http://taxes.about.com/od/deductionscredits/qt/healthinsuran...

fiatmoney 14y ago
"you cannot deduct any insurance costs for any months you were eligible to participate in a subsidized group health insurance plan through your or your spouse's employer"
fr0sty 14y ago
No it doesn't. If I work for a company that does not provide health benefits any health insurance I buy is NOT deductible. and that is one of the many odd decisions made. If you are self-employed (which is what the linked page is about) you are both the employer and employee and you as the employer of yourself get the decuction. People working for "the man" don't get this luxury.
- eurleif 14y ago
  >If you are self-employed (which is what the linked page is about) you are both the employer and employee and you as the employer of yourself get the decuction. Not entirely true. If you're employed by an S corporation you own, the S corporation is the employer, not you, but you can take the deduction.

mgkimsal 14y ago

It's deductible no matter who pays. I've had a private policy paid for by myself for my family for years. I deduct the cost of that from my taxes. The bigger issue is people generally are accustomed to larger/bigger plan coverage from employers, and employers contribute a portion, skewing the 'real' price. High deductible policies help A LOT, but I fear those are going to be harder to use under Obamacare (for seemingly ridiculous reasons). We're paying $330/month for a high deductible policy with $5k deductible. Would be close to $250/month for a $10k I think. And, I think, that's likely how it should be, vs paying $800-$1000/month for a plan with a low (or no!) deductible. I've had friends say "well, I don't have $10k just sitting around in case there's a medical bill!" A few rebuttals to that mentality: 1. Some of these same people have no issues with financing new cars every few years. 2. You'd have $10k in savings much faster if you were only paying $400/month instead of $1400/month for insurance. 3. We had a big issue a couple years ago, and had an emergency room visit. That was January - we didn't get a bill until April, and it had a number to call to work out a payment plan - you can finance your emergency medical expenses. I realize these numbers don't work out for everyone in all cases, but neither does employer-provided health care.

fr0sty 14y ago
> It's deductible no matter who pays. That does not square with this[1]: If you are not self-employed, and you don't work for a company that provides health insurance with a cafeteria plan, the Internal Revenue Service (IRS) allows you to count health and dental insurance premiums as part of the 7.5% of your adjusted gross income that has to be spent on health care before any out-of-pocket medical expenses can be deducted. [1]http://healthinsurance.about.com/b/2010/01/25/are-my-health-insurance-premiums-tax-deductible.htm http://healthinsurance.about.com/b/2010/01/25/are-my-health-...
- mgkimsal 14y ago
  I am self-employed, as is my wife. Most people I know with a spouse with insurance choose to stay on that instead, but it's often not really a better deal - it's just habit/convenience.
14y ago