Is Employer-Subsidized Insurance Causing Higher Healthcare Costs?
photo credit: Progress Ohio
If you’re in a position where you have to buy your own health insurance, you’re probably grumbling about it for many reasons, not the least of which is that you don’t enjoy the same tax breaks on health insurance that employer-subsidized insurance does.
When you’re lucky enough that your employer pays for your health insurance, every cent they contribute in health insurance premiums is 100% tax-free. Basically this means you enjoy the protection of health insurance at a discount, which you wouldn’t get if you were responsible for buying it yourself.
This is highly beneficial because it helps keep the cost of your insurance down, since a company health plan pools the risk of all its individual buyers, resulting in less average risk per person.
There is a downside, however, with some significant knock-on effects, not in terms of the cost of the insurance, but in terms of the costs of the health care you’re receiving.
The Downside of Employer-provided Health Coverage
Think about it this way. When you know that all of your doctor’s visits and treatments are covered by your company health insurance, what incentive do you have to keep yourself healthy through preventative measures, or to actively seek out less expensive treatment?
That’s right – none. You don’t have to worry about how to pay for your health care, and that’s a good thing. Nobody should have to be worried about whether they can afford to see a doctor when they really need medical treatment. On the flip side, you don’t necessarily feel the need to try and keep the costs down for you and your family when you know it’s all covered by insurance.
And that’s why subsidized insurance is just one thing that’s contributing to the ever-increasing cost of health care – which unfortunately impacts on the people who don’t have that employer-sponsored insurance, and most of all on those who don’t have any form of health insurance at all.
The question is what, if anything, can (or should) be done about it? The answer? Probably nothing. Health insurance subsidies are pretty much ingrained in the country’s tax-perk policies, and it’s far more likely that taxes would be “adjusted” in some other area than in this one.
Tags: Add new tag, employer provided, health care, health costs, subsidized health care, taxes
