The Tax Foundation - Should Employee Health-Care Benefits Be Taxed?

"Here's more from our analysis of the tax reform panel's final report to the Treasury:

Recommendations in Need of Reevaluation:

Exclusion for employer-provided health insurance

Both plans would cap the tax exclusion for employer-provided health insurance at $11,500 for families and $5,000 for individuals. A vestige of World War II price controls, the exclusion for employer-provided health care is the largest preference in the tax code with an estimated 2006 value of roughly $126 billion. This exclusion has greatly distorted the health care market by creating a third-party payer system that makes employers and insurance companies—not employees or patients—the true “customers” of health care. Patients do not act as true consumers because they pay only a fraction of the cost and actually have the incentive to over-consume health care. While most economists see the only solution to this government-created problem is to eliminate the exclusion, capping the exclusion may be a short-term step in the right direction. However, the Panel’s recommended cap levels are so high, and indexed to inflation, that most health plans are likely to be unaffected in either the near term or long term. Thus, the proposal may have little effect on controlling third-party health expenses.

Further reading:
Three Decades of Government-Financed Health Care in the United States, by Patrick Fleenor"

자료: The Tax Foundation - Should Employee Health-Care Benefits Be Taxed?