By Casey Mulligan
Executive Summary
- Contrary to common criticisms, employer-sponsored insurance (ESI) provides significant value to beneficiaries and taxpayers far beyond the cost of the tax subsidy.
- Employees value ESI at 75–84 percent more than employers and employees together pay for it, generating an annual private value of at least $800 billion.
- Further, after accounting for the tax subsidy, ESI provides an annual net economic benefit to society of at least $600 billion by reducing fiscal pressures on subsidized insurance programs and encouraging work and business formation.
- In total, ESI generates around $1.5 trillion annually in social value beyond what workers, employers, and taxpayers pay for it, or nearly $10,000 per insured individual.
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