WASHINGTON, July 17, 2024 – The Partnership for Employer-Sponsored Coverage (P4ESC) today underlined opposition to proposals made by the Paragon Health Institute and others to cap the individual income tax exclusion for employer-sponsored coverage.
“The Paragon Health Institute plan to cap the exclusion fails to solve its stated goal: lowering health care costs,” said Neil Trautwein, P4ESC’s Executive Director. “Instead, it will increase employees’ tax burden by recognizing health coverage as additional individual income for tax purposes. Ultimately it will disrupt employer-based coverage – our nation’s single largest source of coverage – entirely. Capping the tax exclusion will lead inevitably to Medicare-for-All and other national health care schemes. It is a bad bargain and a worse policy path to consider.”
P4ESC Chair Melissa Bartlett, Senior Vice President of Health Policy, The ERISA Industry Committee (ERIC), added, “Capping employer-sponsored coverage is a flawed solution that fails to address the real drivers of health care costs. Such caps could force employers to hike premiums or slash benefits, hurting millions of families. Instead of disrupting coverage, Congress should tackle the root causes of soaring health care expenses.”