Conservatives rediscover their dislike of ESI
October 7, 2014 2 Comments
Mark Warshawsky and Andrew Biggs have a fairly standard conservative take on employer sponsored health insurance, combined with a new twist–noting that stagnant wages and faster rising premiums from 1999 onward have increased inequality, because higher paid workers get more tax free income via employer sponsored health insurance than do low paid ones.
I totally agree with this, and they make what used to be the standard conservative arguments about the desirability of altering the tax treatment of employer sponsored insurance, morphed into a way to talk about it viz the language of inequality. However, this produces a political problem for conservatives, because the ACA actually does something about the tax treatment of ESI for the first time, via the so-called Cadillac Tax that is a de facto capping of a heretofore unlimited tax subsidy that disproportionately benefits high wage workers (as Warshawsky and Biggs note).
The most surprising aspect of my debate with Jim Capretta on the ACA a few weeks back was him seeming to forget that Conservatives have long talked about altering the tax treatment of ESI (he didn’t really forget, he just hasn’t shifted gears yet as the WSJ piece has, but he will). The Dems actually did something about the tax treatment of the ESI (some of them didn’t realize they did or have) an aspect that conservatives should have cheered if they were thinking in policy terms (if you take seriously what they said for the 30 years prior to the passage of the ACA).
The piece by Warshawsky and Biggs is part of conservatives preparing to re-embrace actual health policy positions after the 2014 election, and not merely whatever attack maximizes chances for the next election. That is good news.
If you listen carefully….