Comment by WalterBright
4 days 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.
> The obvious solution is to make it tax-deductible.
Or make employer paid health insurance count as income and therefore not tax-deductible.
True. 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.
That's how it works in the UK
Or lower the age for Medicare every year until everyone is covered.
We could just lower it once, to zero, and be done with it.
The US healthcare system is like the Titanic: it turns slowly, and you don't want to fuck around with hitting icebergs.
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We could. Who is going to pay that bill?
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Wouldn’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.
I don’t see how this addresses the comment you replied to.
It 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.
> 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.
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I suggested an alternative solution to the one proposed by the comment I replied to.
I don’t understand how “make it tax-deductible” is an alternative to “nationalize healthcare so it’s not tied to employment.”
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