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Comment by endisneigh | Hacker News Reader

What I don't get is why can't someone, say, one of us, pool together our own insurance that exists outside the employer?

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Insurance does exist outside the employer. I've been self-employed all my life, so I've been purchasing my own insurance without an employer for about 20 years. I used to go directly to a company like Aetna or Blue Shield to buy my coverage, now I go to healthcare.gov once a year to pick a plan.

The gap here is that employer paid plans are subsidized by the employer, who uses them as a tax write off, making un-subsidized plans much more expensive in comparison

True. If you're self-employed, your health insurance premiums are personally tax deductible. If you're not and you make up to 400% of the federal poverty level, the government subsidizes marketplace plans for you similar to an employer. It's not just the self-employed that buy their own insurance, but all the millions of hourly employees that aren't offered healthcare benefits through their employer(s) either.

>>employer paid plans are subsidized by the employer, who uses them as a tax write off,

Calling them a 'tax write-off' makes it sound like something sinister is going on - just about everything a business pays to run their business is deductible, and thus a 'tax write-off'.

Do we call buying paper for the xerox machine a 'tax write-off' and thats the only reason business buy paper?

Its a cost of doing business - just like rent, payroll, heat, electricity etc - there is no special 'write-off' for providing health insurance for a typical company.

Mentioning that they're a tax write-off goes towards explaining why employer-subsidized plans can be cheaper than purchasing your own plan: the employer is buying it with pre-tax dollars, where an employee can only buy that plan with post-tax dollars.

I have no tax knowledge at all, but if you were to create a pass through corporation who purchased the health insurance on the behalf of its members, could you deduct said fees and then pass the savings onto the members the following years?

I guess the overhead of setting up such an organization plus the fact that said corporation wouldn't actually have any revenue are big issues.

You do not have to do all that, simply being self employed is enough. The people getting screwed are those employed by employers that do not offer subsidized health insurance. They simply have to pay for health insurance with post tax dollars.

The health insurance tax subsidy for self employed individuals is not as extensive as that indirectly provided to conventionally employed persons through their employer because it does not reduce the self employment tax, which is substantial.

Whereas with statutory employees anything the employer purchases in that regard is not included in the tax base for the payroll tax or the income tax, i.e. is basically tax free. Self employed folks are treated better than they were a few years ago (no deduction basically), but that is still a big difference.

Thanks for the clarification!

Individuals may qualify for a subsidized plan purchased through healthcare.gov.

You can! When you do that, you essentially get a "Health Share" organization, wherein you pay cash for health care and they reimburse you. Google the term to see which ones are out there. They are typically much, much, much cheaper than traditional insurance.

The biggest drawbacks to such an approach are that you have to deal with the quirks and rules of your organization -- read the terms carefully -- and that you have to deal with the paperwork from the medical system yourself. That doesn't sound so awful until you experience it. You can find reasonable primary care as a cash patient -- direct primary care is everywhere now, and almost certainly what you want: a monthly payment for someone on call to deal with your issues. Urgent care is generally reasonable, too, being an up front single bill at a fixed price per type of issue. But Lord have mercy on you if you need to visit a hospital. The paperwork is stunning. A couple years ago, I went in for some observation and antibiotics for a couple of days, and came out with a dozen bills, all of which have to be called on, paid, negotiated, and some of which are possibly fake.

And because they aren't regulated, they can just decide not to provide any coverage at all.

John Oliver covered Health Care Sharing Ministries (often called Health Shares or HCSMs) a while ago https://www.youtube.com/watch?v=oFetFqrVBNc

That exists, it's a plan called medicare for all.

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