The Stupidity Of Employer-Provided Group Insurance
Finance prof John H. Cochrane writes in the WSJ:
If your employer pays you $100 less in salary and buys $100 of group insurance for you, you don't pay taxes on that amount. Hence, the more insurance costs and covers, the less in taxes you seem to pay. (Even that savings is an illusion: The government still needs money and raises overall tax rates to make up the difference.)To add insult to injury, this tax deduction does not apply to portable, guaranteed-renewable individual insurance. You don't get the tax break if your employer gives you the $100 and you buy a policy--a policy that will stay with you if you get sick, leave employment or get divorced. The pre-existing conditions crisis is largely a creature of tax law. You don't lose your car insurance when you change jobs.
If you're like me, you know people chained to jobs because they need to stay with the employer's health insurance due to some condition they came down with while in their job. Health insurance needs to be untied from employment -- especially since there are fewer and fewer people who stay for more than a few years in a job.
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