Having businesses offer full health coverage almost from the first dollar spent is phenomenally inefficient. Health care is over-consumed because it is essentially, at the margin, free to employees and too cheap — fully deductible — to the company. All incentive for the consumer to control costs is abandoned. Furthermore, the system is nonportable and famously bureaucratic, with the associated costs in time, money and frustration.
To put the “insurance” back in health insurance, we need to remove the tax deduction for routine health-care expenses, whether the coverage is purchased by employers or individuals. If we choose to retain a deduction for insurance against large losses, it should apply equally to plans bought by individuals directly and those provided by employers.
Among other benefits, this would remove a large tax deduction and the savings could be used to reduce other tax burdens. It would also solve the portability problem because without a tax advantage at work most individuals would purchase their own insurance. Most importantly, by buying their own insurance, designed to protect against only relatively large losses, individuals would become conscious of medical costs.
Why do they hate our freedoms? Trying to shift health insurance from group to individual policies sounds like a communist plot.