Final answer:
The present taxation arrangements under the Affordable Care Act can be considered true in making health insurance cheaper for employees, as the employer mandate and structured taxes subsidize the cost of insurance and promote its purchase.
Step-by-step explanation:
True or False: Present taxation arrangements make health insurance cheaper to employees and encourage more of it to be bought. The statement can be considered true when taking into account the provisions of the Affordable Care Act (ACA), which includes an employer mandate requiring all employers with more than 50 employees to offer health insurance to their employees. This is intended to lower healthcare costs and increase employment in the healthcare industry.
Under the ACA, the progressive taxation system indirectly subsidizes employer-provided health insurance by excluding employer contributions from taxable income, thereby lowering the cost to employees and incentivizing them to participate in employer-based plans. Additionally, insurance coverage sold through employment groups or state government-sponsored health exchanges mixes high-risk and low-risk individuals, addressing the problem of adverse selection and making group insurance more affordable. Progressive politicians argue for increased government involvement, noting that preventative healthcare and healthy lifestyles can contribute to lower costs within the healthcare system.
However, issues like moral hazard arise where insured individuals might engage in riskier behaviors as they rely on their insurance coverage, potentially leading to increased healthcare usage and costs. To counteract this, insurers and governments are encouraged to promote preventative healthcare measures. It's important to recognize the political debate surrounding the ACA, with some criticizing the additional taxes and mandates as overreach or a violation of individual choice. Even so, the ACA's goal of making health insurance more accessible and affordable aligns with the mechanisms in place to make insurance cheaper for employees and encourage its widespread adoption.