Kaiser Health News has an informative article busting some common myths about who pays for health care in this country. The article correctly illustrates that most people today have their medical expenses subsidized by others — by either their employers or the government. This is the intentional outcome of more than seventy years of government control of the health care market.

The article makes one common error, however. It counts as a subsidy something which isn’t.

According to the article:

If you’re insured through an employer that files an income-tax return your coverage is heavily subsidized by the feds. Tax deductions for private medical coverage cost the Treasury $250 billion a year.

I’ve written
previously about the difference between health insurance coverage that is purchased through an employer and that which is bought on your own on the individual market. The primary difference is that if your employer pays for your health insurance, you don’t have to pay taxes on the value of those premiums, whereas if you buy coverage on your own, you do.

A common conception of this government-instigated arrangement is that those who have employer-sponsored coverage are receiving a subsidy from the government by not having to pay taxes on their insurance premiums.

But conceiving not paying taxes as getting a subsidy implies that your income belongs to the government, which is doing you a favor by not confiscating a portion of it, as it is entitled to do. Your take-home income, on this notion, is yours by the government’s permission.

But your income properly belongs to you. When the government decides to not tax a portion of it, it isn’t giving you anything — it is refraining from taking something that you earned and had a moral right to keep in the first place (a right the government violates when it taxes the premiums of those buying coverage on their own).

The $250 billion the government doesn’t confiscate every year because of the tax deduction for employer-sponsored coverage rightfully belongs to the Americans who have earned that money; it’s not a subsidy from the government.