If we hope to move to an efficient healthcare system that is fair to everyone, Congress will have to take on the largest subsidy in the tax code. Despite strong opposition from unions and employers, it is possible to reform the tax break for employment-based health insurance without destroying that market.
Premiums paid for employment-based health insurance are excluded from federal income and payroll taxes. The tax exclusion saves workers over $250 billion a year in federal taxes, and billions more in avoided state taxes. For the average worker, that reduces the cost of their health coverage by at least 30%.
Read Full Article »