Tax Subsidies for Health Care

This is by far the clearest and most comprehensive explanation of the various tax subsidies provided for health care in our tax code that I have seen, from (around a 15 minute video with great slides by Larry Leavitt). If the super committee begins discussing tax reform, altering the tax preference provided to employer provided health insurance is a straightforward way to have a consequential impact on health care costs, as well as to reduce the deficit.

The Affordable Care Act has a de facto capping of this subsidy in the form of the tax on high cost insurance that was delayed until 2018 in the law, so Democrats have already voted for this. Altering the tax treatment of employer provided insurance is a hallmark of just about all Republican health reform plans, so this could be a place for an agreement. There could be some concerns about altering this subsidy before insurance is available in exchanges in 2014 which is something to keep in mind. It would be great if everyone watched this presentation before the fur starts flying.


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