How Tax System Destroys Jobs and Healthcare

(This is part of a series of columns for my campaign #ItIsTheSolutionsStupid.  My healthcare solution is Liberty HealthShare. Disclosure here: I am a spokesperson for Liberty HealthShare.)

Tax reform is one major solution that no one is paying attention to.

We need to remove thousands of deductions in the tax code that hurt the overall economy while helping special interests.

One in particular is also making our healthcare costs rise while making us less healthy.

Here it is: the employer deduction for healthcare expenses.

What?  I know it sounds great, right?  After all, your company gets a deduction for providing healthcare for its employees.

Here are the unintended consequences:

• Government loses tax revenue.
• Companies have no incentive to hire or raise salaries.
• Insurance costs rise. Your employer has no incentive to keep insurance costs low when negotiating with an insurer because it is being subsidized by the taxpayers.
• Individuals have no incentive to keep costs low by being healthier; the boss is paying for it.

The September 10, 2016 issue of The Economist agrees:

The culprit is the long-standing tax exemption for employer-provided health-care benefits. This costs taxpayers about $250 billion a year, and incentivises employers to ramp up health coverage rather than raise wages. That, in turns, inflates costs. The ACA’s “Cadillac tax” on lavish plans will mitigate this eventually (it was recently delayed until 2020). It would be better to abolish the deduction completely.

Sure, many will blame the ACA.  And it deserves some blame.  But all the ACA is doing is keeping the deduction that has been there long before the ACA.

The solutions:

• Abolish this deduction immediately.
• In fact, write into law that only individuals can purchase healthcare not employers

What will happen if Congress and the next President acted?

• Costs will drop because there will be more free market.  Instead of one employer negotiating with healthcare providers, there will be hundreds and thousands more customers per employer.
• More people will take responsibility for their healthcare because they will be paying the cost.
• Employees won’t be tied to a company or a job just because of the healthcare benefits.  You can do whatever job you want. Your healthcare will be portable.
• Companies will save money not having to negotiate or administer a healthcare plan.
• Companies will concentrate on what they sell or produce.
• Companies will hire people for what they can do for the company, not on whether they will be penalized for having too many employees.

Here comes my pitch.  The answer is already there. It is Liberty Healthshare.  It does all of this right now.

• If you are an employee and a member of Liberty Healthshare, you can go to your employer and say, “I have my healthcare taken care.  How can I work for you while saving you costs?”
• If you are an employer, Liberty Healthshare can provide a program that allows you to offer medical cost sharing to your employees as an option.  There are still some restrictions due to the ACA, but members are exempt from the fines and penalties of the ACA.
• You can even travel with Liberty Healthshare as members will share your medical expenses if the bills are written in English.

These are my own thoughts on what Liberty Healthshare has done for me.  You should also be aware that this is not health insurance.  It’s totally different and you need to know those differences to find out if it is right for you.

For more information, sign up here or call 888-616-9443.

Remember #ItIsTheSolutionsStupid

 

Tagged as: employer deduction for healthcare, healthcare, Liberty Health Share, tax reform, unintended consequences