Would Bush's healthcare plan cause young workers to decline employer based care?
Question:
I think it would. I am 26/healthy and recently switched from private insurance I paid myself to employer-based coverage. Amazingly, I pay the same amount now as I did before, even though my employer pays about 70% of the cost of my new plan. In other words, my employer-based insurance costs much more (even though it costs the same to me) as comparable insurance I could obtain on my own. If the employer's 70% contribution became taxable, I would simply drop it and pay the same amount for private insurance and not incur the taxable income penalty. Healthy ppl will leave, cost per person left will go up.
Answer:
Half of the uninsured people in America today are uninsured by choice - in other words, the insurance is available through their employers, and they opt of buying it.
So I don't see that changing, regardless of whether or not the insurance becomes taxable income.
Health insurance from the employer is a lure to "catch" desirable employees. Currently, the money that the employers pay for health insurance is fully deductible off of their corporate taxes. So, if it was taxed to the employee, the employers would have to offer something else, to retain the best employees, or they'd go elsewhere for a better deal.
From my understanding of the proposal, no.
By accepting the insurance, even as taxable income comes with a $7500 deduction, even though the insurance for a young person costs much less. They should turn a nice profit on it.
Of course, the government will probably shrink that $7500/15000 deduction before it ever becomes a law.
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