Employer Sponsored Health Insurance Is Not Tax Deductible

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The sex-understates the real cost to you as a worker. The idea though being that if you got $20,000 in wages, you'd have to pay taxes on it. It's not worth much unless you have high tax bracket. For workers in the bottom fifth of the income distribution, they get benefits of around $500 a year from employer sponsored health insurance. If you're low paid and paying only payroll tax, it's not nearly as good a deal.

Economist Ed Dolan of the Niskanen Center talks about employer-based health insurance with EconTalk host Russ Roberts. Dolan discusses how unusual it is relative to other countries that so many Americans get their health insurance through their employer and the implications of that phenomenon for the structure of the health insurance market. Dolan explores the drawbacks of this structure and makes the case for what he calls Universal Catastrophic Coverage.