[orborde]

One major factor in the US is that, from the perspective of an employee, employer plans have a massive tax advantage compared to anything the employee could buy outside their employer.

If your employer pays your insurance premiums, this doesn't count as taxable income for you. So you effectively have a choice that looks like:

- Your employer directly pays $200/mo for your insurance, or

- Your employer pays you $200/mo as cash, the government takes $40 (adjust as appropriate for tax bracket) out as income taxes, and you have $160/mo left over to pay for health insurance.

I can't really speak to the political forces that keep this subsidy in place, though.

https://www.taxpolicycenter.org/briefing-book/how-does-tax-e...

[kmjg88nvf8]

So if you insure yourself privately, you can not deduct it from taxes? That would be an issue then, but seems easy to fix. Why isn't that part of the health care discussion?

[orborde]

You can deduct it, but there are a couple of distinct minimums in the tax code for how much you have to spend before it starts reducing your taxable income. ( https://www.insurance.com/health-insurance/health-insurance-... )

Also, for simplicity, I left out payroll taxes, which are invisibly paid by your employer directly to the government ( https://squareup.com/us/en/townsquare/payroll-taxes-defined ).

So the choice from earlier is actually more correctly stated as:

- Your employer directly pays $220/mo for your insurance, or

- Your employer pays you $200/mo as cash and pays $20/mo directly to the government in payroll taxes, totaling $220/mo. Then the government takes $40 (adjust as appropriate for tax bracket) out of your paycheck as income taxes, and you have $160/mo left over to pay for health insurance.

The payroll tax issue would apply even if you could fully deduct the $200/mo from your personal taxable income.

> seems easy to fix. Why isn't that part of the health care discussion?

I am as mystified as you are.

[kmjg88nvf8]

If employers can deduct more for health insurance than private people, it seems unfair and rigged.

Payroll taxes are another matter to me, that's mostly window dressing. Either employer pays the tax to the government, or pays it to employees and they pay it to the government. The outcome is the same.

I think payroll taxes exist mostly to hide the amount of taxes they pay from the population.