NCPA - National Center for Policy Analysis

PORTABLE, PERSONAL HEALTH INSURANCE SOLVES MANY CONSUMER PROBLEMS

June 27, 2006

In his State of the Union address in January, President George W. Bush proposed making health insurance individually owned, personal, and portable, enabling it to travel with employees from job to job.  It is an idea whose time has come, says John C. Goodman, president of the National Center for Policy Analysis.

The current employer-sponsored health care system has created problems that have left many employees susceptible to disruption in their health care decisions, including:

  • A lack of continuity of coverage, meaning employers, to reduce costs, may switch health plans or cease providing coverage altogether.
  • A lack of continuity of care, whereby employees who switch jobs must not only switch health plans but also doctors, since plans tend to have their own networks.
  • Employer selected packages that protect themselves from attracting workers whose primary motivation is getting their medical bills paid

Fortunately, says Goodman, there is no economic reason that employees can't enroll in health plans that meet their needs and retain them as they travel from job to job.  Employers should be able to buy personal and portable insurance for their employees with pre-tax dollars, just as they are able to buy group insurance today.  The effects of this type of plan would be beneficial to all:

  • Portable health insurance would promise a continuing relationship with an insurer and, therefore, a continuing relationship with doctors and health facilities.
  • For employers, portable health insurance means small groups would no longer treated as self-contained pools and rated each year based on changes in their employees' health status.
  • Employees would become members of very large pools in which no one can be singled out because of a sudden, large medical expense, and premium increases are the same for all.

Source: John C. Goodman, "Portable, Personal Health Insurance Solves Many Consumer Problems" Health Care News, Heartland Institute, June, 2006

 

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