The Original Sin of U.S. Health Policy | Cato Institute
…where a pickpocket takes money out of your wallet, and with it buys you a glass of chardonnay. Although you would have preferred a pinot noir, you decide not to look that gift horse in the mouth and thank the stranger profusely for the kindness, assuming he paid for it. Most economists believe that employer‐based health insurance is an analogue of this bar scene.” —UWE REINHARDT Employers pay for employee health benefits by taking money—in total $1 trillion per year—from workers’ cash wages and other compensation. Workers earned that money. It belongs to them. But they don’t control it. Employers do. Why? For 100 years, Congress has taxed cash wages but excluded health benefits from taxation. In effect, the tax code penalizes workers who want to control their earnings and their health insurance. This original sin has been the cause of nearly every problem with the U.S. health sector, from unfair discrimination to inadequate coverage to excessive prices. The OECD says the United State
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