By NextBestFitPayroll tax (employer and employee)
Replace premiums mainly with a payroll tax, similar to what employers already pay in premiums.
Draft decision:RejectedConfidence: medium · not yet reviewed
Mix chosen.
Review ledgerHow this path connects
Addresses
Replacing premiums with taxesThis path
Payroll tax (employer and employee)
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Enact a health payroll tax split between employer and employee
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
The question it answers
Replacing premiums with taxesReplacing premiums with an easily collected payroll tax follows existing employer payment flows, but taxes wages rather than investment income.
What it fixes
None identified.
What it creates or worsens
- Employer health taxes can lower wages at firms that never offered coverage
A payroll tax imposes costs on low-wage firms and can hurt them.
Who's affected
Who gains
- People with employer coverage
- Employer health taxes can lower wages at firms that never offered coverage: Savings at firms that offered expensive coverage can raise workers’ wages.
Who loses
- Low- and middle-income households
- Employer health taxes can lower wages at firms that never offered coverage: New employer health taxes tend to reduce wages at firms that previously offered no coverage.
- Employers
- Employer health taxes can lower wages at firms that never offered coverage: Small businesses that offered no coverage face a new payroll cost.
Other ways to soften the losses
- Phase in for small businesses
Where it has been tried
- Germany, France: Payroll contributions fund most care.
- Germany: German statutory health insurance is funded mainly by a payroll contribution of 14.6% of earnings, shared equally by employers and employees, plus a fund-specific supplementary rate (2026).