That health care benefits are provided through employers for the most part as a pre-tax benefit is the most regressive kind of tax policy around. Let me get this straight: I work and therefore can pay taxes, and I get my health care benefits, which are really a form of compensation, free of tax. But then there are people who are without a job temporarily (or worse) or work for a company that does not sponsor their health care, and that person has to pay taxes on the coverage they purchase?
So the folks who are better off get health care pre-tax and the employer can deduct the cost, but folks who purchase their own coverage have to buy it with after-tax dollars. Hmmm.
Former Secretary of U.S. Health and Human Services Mark McClellan notes in a Heritage Foundation transcript that
We’re spending a lot of money on the employer tax break today, well over $200 billion a year and growing rapidly; it is by far the largest tax expenditure in the federal tax code. The second-largest, the home mortgage deduction, which many people think of first when they think of the federal tax code, is about a third as large as the health insurance tax expenditure, and the mortgage deduction is capped as well.
The number juxtaposed against the home mortgage deduction is eye-opening.