NCPA - National Center for Policy Analysis


March 14, 2006

During his State of the Union address, President Bush devoted only a few sentences to health policy. But as the president was speaking, the administration released a five-page document describing health policy proposals so sweeping and bold, they are comparable in scope to Hillary Clinton's proposals of a decade ago. These reforms will leave a lasting mark on social policy in this country, says John C. Goodman, president of the National Center for Policy Analysis (NCPA).

One of the most radical reforms the president proposed is to allow employers to purchase individually-owned, personal and portable insurance for their employees -- insurance that would travel with them from job to job, says Goodman.

Although few specifics are available, the genesis of this idea is a plan designed by the NCPA and Blue Cross/Blue Shield of Texas. The administration is proposing to take this idea nationwide -- allowing federally regulated insurers to sell such policies in every state.

  • One of the peculiarities of the current system is that the health plan most of us have is not a plan that we chose; rather, it was selected by our employer.
  • Moreover, we can easily lose coverage because of the loss of a job, a change in employment or a decision by our employer.
  • Virtually all employer health insurance contracts last only 12 months; at the end of the year, the employer -- in search of ways to reduce costs -- may choose a different health plan or cease providing health insurance altogether.

Under the president's proposal, employers initially would pay most of the premiums (as they do today). But, this insurance would be owned by the employees and would travel with them as they move through the labor market. Thus employees would get portable insurance (a characteristic of individual insurance), but at group insurance prices, says Goodman.

Source: John C Goodman, "Bush's Answer to Hillarycare," National Center for Policy Analysis, Brief Analysis No. 542, March 14, 2006.

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