September 3, 2015

THE ENTIRE POINT OF HEALTH CARE REFORM IS TO RE-IMPOSE COSTS ON CONSUMERS:

In Defense of the 'Cadillac Tax' (IKE BRANNON, 9/03/15, Weekly Standard)

That the Cadillac tax is in the crosshairs of conservatives is maddening; allowing employers to provide health insurance tax-free to their workers is terrible policy, a truism that any honest economist--whether liberal, conservative, or otherwise--would agree with. The pre-Cadillac tax status quo creates two perverse incentives: First, workers end up with more health insurance than they would ever purchase on their own (since tax-free health insurance is worth more than income that's taxed at 30%-50%), which gives people less take-home pay to spend as they see fit. 
 

Second, more generous health insurance entails lower co-pays as well as other provisions that insulate the worker from the actual cost of their health care. As a result, people become less sensitive to prices when seeking health care, and they consume more of it--most of which does nothing to improve health outcomes, numerous studies have shown

Posted by at September 3, 2015 7:29 PM
  

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