This past week I received my 2010 health benefit packet from my employer. With all the talk about better health insurance systems, I thought I should look into getting my own private insurance and pocketing the difference: our employer will transfer the up-front costs of health insurance back to us if we get our own insurance. While obviously this won’t include the costs my employer incurs by having to manage health insurance in the first place, it is a significant amount of money. I’d get $310 added to my monthly salary if I declined my employer’s insurance. What with the lack of a raise this year, that’s tempting.

So I went online and found that here in California, a high-deductible plan would be about $180. That’s more expensive than what I’ve been hearing from people in other parts of the country, but still, that’s an extra $130 a month; of course, after taxes, I’d only pocket about $100, but a hundred dollars a month is nothing to sneeze at¹. My health care costs don’t run anywhere near $100 a month.

Unfortunately, it doesn’t work out that way. The problem is something Senator McCain talked about last year, and what the Republican plan tries to fix²: the government doesn’t like individuals and actively discourages them from customizing their health insurance. When my employer “gives” me $310 in health insurance I don’t get taxed on that $310. When they instead leave my salary $310 higher every month and let me get my own insurance, I am taxed on it. Instead of $100 a month extra for getting a personalized high-deductible plan, I’d end up about $30 ahead every month. The $310 gets reduced to about $210 after taxes. Less the $180 for insurance, leaves $30. Given the high price of health care—caused, in part, by this disincentive—I probably do pay something near that.

My next thought was, my employer manages a medical flexible spending account. Can I just have them deposit the $180 a month into that, and use it to pay for insurance? No. Congress really, really doesn’t want me buying my own insurance: flexible spending accounts aren’t that flexible. I’m forbidden from using insurance premiums as an FSA expense. I knew before looking into it that my employer has a government incentive to provide health insurance; I hadn’t realize just how much I’m discouraged from getting my own. The current system hates competition.

And yet that’s what the Democrat’s plan doubles down on: a massive central authority far bigger than any individual employer, less individual choice (more mandates) and a government-run option to rule them all. Free choice is the driving force of competition. This poor policy doesn’t just raise my health care costs; it raises your costs, too, because it discourages competition. It raises the cost of your health insurance (that is, the amount your paycheck needs to be reduced by), and it raises the costs of the health care that insurance pays for.

We don’t need a 2,000 page bill to make health insurance more competitive. We just need to stop discouraging people from making their own choices.