The most significant healthcare reform of Donald Trump’s first term may have been letting businesses give their workers pre-tax funds to buy their own health insurance. But few firms have opted to embrace this option. A modest regulatory reform could soon change that.
Tax incentives have made employers the main purchaser of health insurance in America. But employer-sponsored insurance plans poorly fit individual workers’ needs and typically overpay for medical care. Although a 2019 reform allowed firms to give their workers pre-tax funds to purchase their own health insurance, this new arrangement is being held back by overregulation.
The purchase of healthcare benefits by employers doesn’t work well. Just when staff have begun to understand their insurance plans, human resource departments tell them that everything is about to change. Employers don’t enjoy the experience either. The cost of covering a family has risen from $9,950 to $25,572 over the past two decades, and Starbucks now spends more on healthcare for its staff than it does on coffee.
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Chris Pope is a senior fellow at the Manhattan Institute. Follow him on Twitter here.
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