>This creates a scenario where a dollar into the insurance budget yields more than a dollar worth of value
Using this same logic, a better use of that dollar would be spending it on taxes as the even larger government can negotiate even better rates with healthcare providers, providing even more value to the employee.
Instead, the company fights to keep that dollar so they can spend it as they see fit, and the employee wants that dollar so they can use it as they want to.
Yes. Up to a point. It's true that in general, the government currently pays less than private insurers.
What's not clear is what happens if/when the government is the only one paying hospitals to keep their doors open. At the reduced rate, hospitals will have hard choices to make. Only about 20% of hospitals are for-profit. For the other 80%, less money coming in the door will result in changes of some kind. I can't imagine how hospitals can do that, and make things better for patients at the same time. Something's got to give.
The same thing will happen as in almost every other developed country: average well-being will go up but some people will have to wait longer for treatment. It’s not like this is some novel, utopian idea. Public heath care is the norm in most western countries with plenty of variations and lessons-learned to choose from.
That's not entirely true. Taxes on production and services are ultimately taxes on consumption, this is part of why many economists have advocated for a mix of raising income taxes on specific income brackets and having a more generous EITC.
You could of course do as you propose, but that same logic could also be used to argue that we simply shouldn't let healthcare providers negotiate with employers and instead restrict them to dealing directly with State entities (since otherwise the bargaining power becomes slanted against individuals).
Edit: I didn't clarify well, the reason I mentioned the point about production taxes is because many minimum wage employees work in places like Walmart that sell commonly needed items and thus some of the benefit is lost because you've increased costs for the people you're helping. In theory this isn't a problem for luxury goods but that's more complicated so I haven't talked about those much.
> and thus some of the benefit is lost because you've increased costs for the people you're helping
This is nonsensical. If paying that one dollar in taxes necessitated raising the prices, then the company spending it on insurance would also necessitate raising prices.
Using this same logic, a better use of that dollar would be spending it on taxes as the even larger government can negotiate even better rates with healthcare providers, providing even more value to the employee.
Instead, the company fights to keep that dollar so they can spend it as they see fit, and the employee wants that dollar so they can use it as they want to.