Flatten the Tax Treatment of Health Insurance
Preferential tax treatment for health insurance purchased through employers distorts consumer behavior and stunts the development of a competitive individual insurance market and other innovations. Congress should equalize the tax treatment of health insurance by making all health insurance taxable (or by making all health insurance excludable). Either approach would be better than the status quo, but making all health insurance purchased with after-tax dollars is preferable, assuming it is accompanied by a corresponding reduction in the general tax rate.
Suggested citation:
Center for Modern Health. "Flatten the Tax Treatment of Health Insurance." August 2024.