I understand that there is no state income tax in Texas, so the maximum tax benefit for employer-sponsored coverage is around 43%. Granted, a 43% discount seems a formidable incentive, except:

(1) Small company plans use modified community rating, in that neither sex nor health status can be used to set individual rates. Although the employers themselves are rated, my understanding is that Texas has a 1.67-to-1 band around rates that can be charged to small companies.

(2) Many of the articles presented here argue that community rated coverage– even modified– is at least twice as expensive as that individual coverage.

Since employer-sponsored coverage is community rated, individual coverage should be available at a 50+ percent discount relative to employer coverage. So wouldn’t it follow that employees would be better off taking benefits in the form of taxable income, and forgoing the 43% tax discount in favor of a 50%-plus savings on individual coverage?

What are the going rates for individual and small-company coverage in Texas?

A former college roommate of mine wanted to provide subsidized coverage to his workers at an apartment complex he owned. After the costs became unaffordable, he discovered less than one-third of his workers were even participating. Most his employees were not willing to pay their small share of the premiums. The only employees to sign up were the ones with pre-existing conditions. They were the only ones who considered his health insurance plan a good buy.

Health insurers have essentially enjoyed charging “commercial rates” to employers and is why they don’t want to see an end to employer based health insurance.

The whole “risk pooling” is ridiculous anyway. Why shouldn’t health insurers be required to compete for customers like every other type of insurance? And why doesn’t even the Republican HCP demand so?