THE MISGUIDED QUEST FOR UNIVERSAL COVERAGE

April 10, 2009

America's dysfunctional health care financing system needs to be reformed.  But the goal should not be universal coverage.  Reform should simply aim to make health insurance more affordable and portable, says Ramesh Ponnuru, a senior editor at National Review.

We should make it easier for people to buy insurance that isn't tied to their employment, says Ponnuru:

  • The existing tax break for employer-provided insurance could be replaced with a tax credit that applies to insurance purchased either inside or outside the workplace.
  • At the same time, state mandates that require insurers to cover certain conditions, which make it expensive to offer individual policies, could be removed.

These two reforms would address most people's anxieties about the health care system:

  • Insurance would be more affordable, especially for people who cannot get it through an employer.
  • This would enable 20 million more Americans to get insurance, according to a model created by Steve Parente, a University of Minnesota health economist.
  • More important, people would own their insurance policies and be able to take them from job to job; they would no longer need to worry about losing their job and their insurance at the same time, or feel they need to stay with a job they dislike because they need the benefits.

Critics of this free-market solution have argued that it would cause the current employer-based health insurance system to unravel.  But that system is already unraveling, and if public health plans are created, they would unravel further as employers dumped their workers onto the public plans, explains Ponnuru.

Furthermore, people with pre-existing conditions would find it hard to get coverage.  In the long run, the option to buy renewable policies that people could take from job to job would keep most people from needing to face this problem.  Direct government subsidies could help the remainder, says Ponnuru.

Source: Ramesh Ponnuru, "The Misguided Quest for Universal Coverage," New York Times, April 9, 2009.

For text:

http://www.nytimes.com/2009/04/09/opinion/09ponnuru.html

 

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