I believe we could fix health care costs by removing just one law.
Stop making health insurance a tax deductible employee benefit.
Think critically about the effect that small change would have and you'll see why our system is broken.
If your employer pays for your car insurance as a benefit, they pay for it with post tax dollars, so they don't do that.
So, employers pay the premium on your health care for the tax advantage. Now consider the how psychology behind not being the one who pays for the premium.
Do you care how much your services cost? No.
Do you care if the premium goes up? No.
Do you shop around for better insurance? No.
Do you care if you loose your job if you're sick? Hell yes.
In effect all normal market pressures are gone. No one who consumes resources cares about their costs because they're are completely disconnected from paying them or some derivative of them.
This is why doctors don't post prices.
While the net effect for people with employer provided health insurance is ever increasing rates, the effect on those people without health insurance is brutal. They are trying to enter a market that has no price pressure.
The ACA does remove that tax exemption, albeit partially. Every dollar above $10k or so ends up being taxed now. And not a small amount, either: the tax is to the tune of 40%. And since the cost of healthcare will continue to rise faster than inflation for the foreseeable future, more and more employer health plans are going to be hitting that number.
I'd certainly prefer the tax exclusion to disappear entirely, but the ACA is nothing if not an attempt to offer coverage to the poor and people with pre-existing conditions while doing the minimum possible to disrupt the healthcare market. That's why it's a bit of a Frankenstein: no one in their ideal world would have chosen the ACA as their ideal policy. But given the set of institutional actors and the setup of our government, it may well be the best that was possible. That's how the Obama administration thought of it, at least.
IIRC that tax was actually a pretty nasty fight between the Obama administration and labor unions, who get their members relatively good benefits and will be hit disproportionately by it. And you know what? The tax-free cap may well have been significantly lower with Republican input. But they chose to put 100% of their efforts into making a mediocre law fail than trying to turn it into a good or great one.
Apologies for the angry rant.
Employer premium contributions for employees and their opposite-sex spouses and tax dependents are 100% deductible as business expenses under federal and state tax law. This is true regardless of business type-sole proprietorship, partnership, LLC, corporation, etc. These rules also apply to owners of C corporations and LLCs classified as corporations for tax purposes. These business owners are considered to be employees of the business for purposes of the tax treatment of premium contributions.
http://healthcoverageguide.org/reference-guide/laws-and-righ...
http://www.healthaffairs.org/healthpolicybriefs/brief.php?br...
