One of the most frustrating arguments against expansions of health insurance is when someone finally states that “we shouldn’t be responsible for other people’s health care.” Often, I hear this one wheeled out when discussing subsidies on the exchanges under the PPACA. Many question why we, as taxpayers, should be forced to pay subsidies to people making up to 400% of the poverty line so that they can get health insurance.
What makes this argument frustrating is that almost everyone making it is getting a subsidy, too.
You likely know it, but when you get your insurance through your job, that money is not taxed. When the government decides not to tax something, they are giving up revenue. That hurts the balance sheet. Every time the government passes a new deduction or credit, it’s a tax expenditure.
This means that when you get your insurance through your job, it’s being subsidized by the federal government. Taxpayers are paying for part of it, the part the government doesn’t take in.
How much is this subsidy to you? The tax policy center said it was $131 billion in 2008. That’s a lot of money. The Joint Committee on Taxation calculates that the subsidy will be almost $660 billion from 2010-2014. For the record, that is WAY more than the cost of the PPACA.
Now, if you all want to give up that tax expenditure, so be it. We’d be much closer to solving the deficit problem, and the country as a whole might be more inclined to push for more comprehensive cost controls. But until then, it behooves everyone with employer sponsored health insurance to stop complaining about anyone else getting a subsidy.