
Cost of Employer-Provided Health Insurance Rises Toward $19k a Year - myroon5
https://www.wsj.com/amp/articles/cost-of-employer-provided-health-insurance-rises-toward-19-000-a-year-1505838600
======
costcopizza
I don't think employers should even offer health insurance.

Leave it to the consumer to buy just like all other insurance. In fact the
increase in wages could be used to fund a basic preventative care plan (read
not full on single payer) for all Americans.

~~~
fragsworth
But as an employer in the U.S., you get to write off medical insurance as an
expense that isn't counted as income for the employee. It's entirely tax free,
and a rational employee will take it into account as part of their
compensation package.

If you don't want employers to give it to employees, then we should fix the
tax situation.

~~~
dangero
You nailed it. When I started my own consulting business I just about fell out
of my chair when my accountant said I couldn’t write off my health coverage. I
pay about $19K a year and that’s after taxes so more like $25K+.

~~~
zaroth
Read this [1], then, consider firing your accountant and filing an amended
return.

[1] -
[https://www.irs.gov/publications/p535/ch06.html#en_US_2016_p...](https://www.irs.gov/publications/p535/ch06.html#en_US_2016_publink1000208843)

~~~
dangero
S-Corp greater than 2% ownership. This means I can sort of write it off, but
only after the corporation providing the money through payroll which means
paying tax on it upfront. Doing it that way could end up costing me money
because payroll taxes are higher than corporate dividends.

In general I think the point is, why can corporations just straight write off
premiums for their employees when self-employed types have all these special
rules to follow vs just a standard deduction?

~~~
didgeoridoo
If you're an officer in an S-Corp, you're required to pay yourself a "market
rate" salary for payroll tax purposes, and cannot legally use the salary/draw
distinction as a tax avoidance strategy. If you're not paying yourself a
salary, the IRS gets very annoyed.

If you're a sole proprietor, the tax impact should be equivalent whether you
choose to take draws or salary:

> Sole proprietors and members of partnerships are free to pay themselves — or
> otherwise take the profits out of their businesses — whenever they’d like.
> Payroll withholdings do not apply, but each individual essentially pays the
> equivalent on his or her reported income at tax time.

[https://quickbooks.intuit.com/r/payroll/salary-or-draw-
how-t...](https://quickbooks.intuit.com/r/payroll/salary-or-draw-how-to-pay-
yourself-as-business-owner/)

~~~
dangero
Paying the health insurance through payroll would be in addition to the fair
and reasonable salary. Say I set a fair and reasonable salary of $65,000, then
I want the S-Corp to cover my health insurance $20,000 a year then I need to
set payroll to $85,000.

Yes, I could continue to pay myself just $65,000, but the IRS could come
knocking and say, "you said you paid for health insurance through S-Corp
payroll, so that means you only gave yourself a $45,000 salary which is not
fair and reasonable.

------
patrickg_zill
My view: we need price transparency.

Find out a medical code, call 3 different hospitals in your area and try to
nail them down on a price for that billing code - the variance will be large;
but given they should all have similar price structures and pay wages that are
roughly the same, they shouldn't vary by much more than 5% ...

~~~
cptskippy
Price transparency doesn't really help when you can't factor in all the
potential costs and unknowns. It certainly is of no use when there's a life
threatening emergency.

A birth might be a flat $4000 but what happens if the mother has high blood
pressure and needs to be on a magnesium drip? Or the baby is in distress and
there's an emergency caesarean? Are you going to call around for a better
rate?

The problem with our medical system is insurance. Insurance companies are
always playing games to avoid paying bills and they force medical providers to
play games to get paid. Vast amounts of money are wasted in billing and claims
departments trying to process or deny claims.

It's gotten to the point where an insurer can fine the insured for submitting
a claim with a code that requires prior authorization after seeking care from
a healthcare provider. I'm not sure how pricey transparency would help with
that.

~~~
leifaffles
This is a particularly naive understanding of markets.

To restate your argument: there are sometimes unpredictable health care events
that arise for which one cannot negotiate, bargain, and price compare in
advance. Therefore, price transparency doesn't work.

The problem is you wouldn't make this argument about any other sort of good
(for example, an emergency or home car repair) because you know exactly how
markets function in those cases.

The answer is: when there's price transparency, and consumers are incentivized
to shop around and demand lower prices, prices come down. This benefits not
only yourself, but also consumers who don't want to (or are unable to) perform
this role themselves.

This is why you pay cheap prices at the grocery store even if you don't
haggle, clip coupons, and so on. This is why "emergency" home and car repair
(while it may cost more) does not cost an order of magnitude more than "non-
emergency" home or car repair.

~~~
speedplane
Some reasons why healthcare markets are not nearly as efficient as other well-
functioning markets (like car insurance):

\- Prices are extremely inelastic: You'll pay whatever you have to not die.

\- Consumers have far less control over what they purchase: they are told to
purchase things by doctors, who may have different incentives.

\- Healthcare isn't a "commodity" that can be easily swapped out. Prescription
drugs may be commodities, but doctors are not. People won't easily swap
doctors, making the entire system less efficient.

\- There is no "perfect information", in economics speak: people know very
little about what the quality of care they are receiving.

\- It's extremely expensive to bring healthcare "products" to market (e.g.,
new drugs, hospitals, etc.). Like building a nuclear plant, very high capital
costs reduce the number of players that can enter.

------
watertom
The only solution is for employers to stop offering healthcare. Give the
equivalent in salary to employees and let the employee figure it out. When
this starts to en masses healthcare will get figured really quickly, i.e.
single payer

The Fortune 1,000 won’t do this because they can control employees, wages and
competition. Getting a small company off the ground is so much harder because
only recent grads are willing to take a job without healthcare. I’ve turned
down a dozen companies because of healthcare issues.

I also find it strange that we discuss guaranteed income as a viable solution
but not guaranteed healthcare.

~~~
pfranz
I know lobbyists are pushing their agenda, but why is nobody talking about the
economic freedom of untethering employment to heathcare? So many people are
tied to less than ideal jobs or prevented from starting their own business
because of insurance. You also constantly hear about companies hiring
contractors or cutting hours just under the margin where they owe benefits.

It's funny that I often hear about how expensive COBRA is and how it's not a
good deal. That's what your employer is paying for your insurance. (in an
ideal world) that is would-be compensation of your's.

I know the actual cost of healthcare isn't pretty, but it does no one favors
by hiding it and tying it to your employer with weird tax incentives.

------
l8again
Bernie Sanders "Medicare for All" plan makes all the sense in the world.
Expand medicare for everyone. Pay the government instead of insurance premium.
Medical costs go down. Doctors/hospitals might earn less, but will have
guaranteed payments. Medicare, a government program, is considered the gold
standard of healthcare, so this isn't the government's first rodeo.

~~~
slickdifferent
If you think government run healthcare is the solution you should talk to any
military member or veteran; people are literally killing themselves in VA
parking lots because the care is so bad.

~~~
pgodzin
Isn't a big part of it the huge wait times because VA hospitals are
overburdened by the number of vets? If they were covered by any hospital in
their area rather than specific VA hospitals, presumably the care would be a
lot better.

~~~
schmidty
And who controls for the number of vets and the number of VA hospitals? The
government.

Do you think they would do better in a bigger version of this for the whole
country?

------
unabridged
Health insurance companies are running out of time and they know it, this is
their last ditch effort to get as much money as possible. There is no point to
lower prices, why gain market share if there is no "later" when you can
extract more profit? Why enter the health insurance market if you are not sure
how long it will last?

~~~
refurb
Huh? You think it's the insurance companies who are making the profit? You do
realize that ACA caps their margins, right?

~~~
projectileboy
But only on policies issued through ACA marketplaces, no? Most health
insurance in the US comes through employers.

------
vadym909
About time for someone to start offering an insurance plan where all
consultation is via facetime/video chat and expensive non-critical operations
are done in Mexico or a ship parked in Int'l waters close to major cities on
either coast. Only get an emergency room insurance for the US!

~~~
wavefunction
That or provide universal health care not tied to employment.

Given my experiences with in-person doctors I think video-chatting with one
would be about the most idiotic waste of my time possible.

~~~
timsayshey
Where I'm from 90% of what a general practitioner does is give out
antibiotics. I hate the over prescription of antibiotics but they could easily
prescribe that over video chat. This would keep sick people at home and allow
doctors to focus on people that actual need to come in to be physically
examined.

------
uptown
This page has some good data on 2018 rate increases, provider changes, mandate
enforcement, etc.

[http://www.kff.org/health-reform/issue-brief/an-early-
look-a...](http://www.kff.org/health-reform/issue-brief/an-early-look-
at-2018-premium-changes-and-insurer-participation-on-aca-exchanges/)

------
frgtpsswrdlame
Is there a good breakdown of where those dollars go?

~~~
tyingq
You mean once it goes from the employer to the insurer?

Here's an article on Blue Cross that covers profits, claims, etc:
[http://www.wral.com/blue-cross-profits-soar-as-losses-on-
aca...](http://www.wral.com/blue-cross-profits-soar-as-losses-on-aca-policies-
fall/16559789/)

------
myroon5
Paywall bypass link:
[https://m.facebook.com/l.php?u=https://www.wsj.com/amp/artic...](https://m.facebook.com/l.php?u=https://www.wsj.com/amp/articles/cost-
of-employer-provided-health-insurance-rises-toward-19-000-a-year-1505838600)

~~~
jaytaylor
Not sure why you've been downvoted, doesn't seem very nice considering most of
us are stuck behind the paywall for this article.

Thanks.

------
md2be
There are simple answers Health Insurance affordability in the US. Rationing.
No NOT via a single payer system where some all-knowing official decides who
does and does not get care. Rather, the rationing is done by the buyer. For
example, Buyer one could decide to only buy a policy which covers only generic
drugs, which would exclude all patented drugs (newer and even superior), Buyer
2 could decide to buy a policy which covers generic drugs and patented drugs
in one or more specialties (e.g., cardiac). The theme is let the buyer decide,
not everyone wants to live the last 10 years of their life struggling to
regain their youth.

~~~
comicjk
Are there examples of such a system working anywhere? It sounds plausible, but
the fact that it didn't arise pre-Obamacare gives me pause. It seems like the
demand for it might not be prevalent enough, or the savings too small.

I'm interested in new models, but I'm tired of the US thinking it has to be
special with its healthcare system and wasting a trillion dollars a year.

------
wahern
With Kaiser Permanente Northern California, for a family of 4 $18k buys you a
gold plan with $0 deductible, and $20k buys a platinum plan. This is on the
open market. I just priced it on their website. Most plans are substantially
cheaper.

HMOs are really the way to go, but unfortunately Americans stupidly prefer to
pay a huge premium for more choice (or at least one very specific dimension of
choice). A family member who is a long-time partner at a law firm forced her
firm to purchase a plan that allowed her to keep her doctor of 20+ years. This
happened during the nationwide market reconfiguration as the mandates rolled
out and insurers aggressively re-architected their plans and provider
networks. Now she rants and raves about how Obamacare raised the costs of
healthcare, and her partners resent her for forcing the huge premiums on
everybody. She's totally unwilling to consider that the problem was entirely
of her own making; that her firm could be paying a fraction of their current
costs for the same quality of care, just not including that one specific
doctor.

HMOs aren't very common, and in many regions they seem to suck. Fortunately,
Northern California Kaiser is one of the best hospital systems in the nation.
If you live in the Bay Area I highly recommend it. Kaiser aggressively pursues
cost-cutting measures and efficient service delivery procedures. Appointments
go through a phone bank of nurses with a rotating staff doctor, so minor
illnesses like a cold or flu don't require wasting your primary physician's
time. For more serious but still common injuries like a broken wrist you're
directed to, e.g., their sport injury unit clinic; again saving both the ER
and the primary physician's time. Kaiser runs their own labs, and the volume
of people their labs efficiently handle is incredible. All the doctors are
employees (as opposed to independent, affiliated providers like in many for-
profit hospitals), and Kaiser doctors very consistently apply uniform policies
on best practices, prescriptions, etc. I think they're large enough that they
run their own studies; at least that's the sense I get when I've inquired
about why they choose X instead of Y.

All of this comes across to some people as impersonal, but personally I think
it's amazing. I've never had an interaction (nor have any of my family
members, AFAIK) that left me feeling cheated for attention, even though
there's always the sense that everybody--doctors, nurses, staff--is working to
keep things moving along at a brisk pace. The way they've balanced conflicting
requirements is really laudable. After being with Kaiser for many years, other
hospital systems seem downright chaotic.

------
NTDF9
It's cheaper to fly to India, stay in an upscale hotel, meet personable
doctors, get treatment, relax and come back.

Not saying this is practical for everything but people really should start
considering alternate countries for healthcare.

The US is a mess.

------
justforFranz
Hey, doctors have a lot of shitty real estate investments they need to cover.

------
ryanmarsh
Currently spending $18,382.32/yr

Math checks out.

~~~
tertius
Bonkers.

If you're a christian you could lower that considerably. Medishare.

------
transverse
More paywalled crap. Don't you have a better link?

------
unit91
What?! Surely this can't be possible. We already have an _Affordable_ Care
Act...

~~~
nasredin
_Knock on wood_

------
sbenitoj
It genuinely blows my mind that some of the top comments are pro-socialized
medicine.

This is a forum populated primarily by hackers and people interested in
starting or working at start-ups -- should we also have a single payer of all
hackers? The notion is laughable, but it's put forth seriously when it comes
to medical care. Like all problems of costs being "too high" this one is
caused by artificially restricted supply (govt regulation of medical system)
and skyrocketing demand (much of which is driven by the abysmal nutrition
advice the US govt has doled out over the past 50 years which has only made
2/3 of the country obese and overweight).

Control economies do not work, how much more evidence do we need before people
stop saying "this time is different, we just need the RIGHT people this time"?

~~~
comicjk
I'm not in favor of single payer healthcare, but to say there's no evidence
that it works is inaccurate. Healthcare in Canada provides the same health
outcomes as ours for half the price. If that doesn't interest you because they
do it with the wrong philosophy, you're an ideologue. In fact, the evidence
that your proposed changes would give a 50% reduction in cost seems a lot
slimmer than the case for straight-up single payer.

