Employer-sponsored, personal, and portable health insurance

Health Affairs

Volumn 25, Issue 6, 2006, Pages 1556-1566

  Goodman, John C ^a  

^a National Center for Policy Analysis   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ADULT; CAREER MOBILITY; COST; HEALTH CARE POLICY; HEALTH INSURANCE; HUMAN; MIDDLE AGED; NONBIOLOGICAL MODEL; ORGANIZATION AND MANAGEMENT; REVIEW; TAX; UNITED STATES;

ADULT; CAREER MOBILITY; HEALTH BENEFIT PLANS, EMPLOYEE; HEALTH CARE REFORM; HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT; HUMANS; MASSACHUSETTS; MEDICAL SAVINGS ACCOUNTS; MIDDLE AGED; MODELS, ORGANIZATIONAL; TAXES; TEXAS; UNITED STATES;

EID: 33845341077     PISSN: 02782715     EISSN: 02782715     Source Type: Journal    
DOI: 10.1377/hlthaff.25.6.1556     Document Type: Review

References (24)

1. K.T. Stroupe, E.D. Kinney, and T.J. Kniesner, "Chronic Illness and Health Insurance-related Job Lock," Journal of Policy Analysis and Management 20, no. 3 (2001): 525-544.
2. In a 2002 poll of female swing voters conducted for the National Center for Policy Analysis, pollster Bill McInturff found that portable health insurance was not only extremely popular, it ranked right below equal pay for equal work.
3. R.E. Herzlinger and R. Parsa-Parsi, "Consumer-driven Health Care: Lessons from Switzerland," Journal of the American Medical Association 292, no. 10 (2004): 1213-1220.
4. See, for example, the Physicians for a National Health Program proposal outlined in D.U. Himmelstein and S. Woolhandler, "A National Health Program for the United States: A Physicians' Proposal," New England Journal of Medicine 320, no. 2 (1989): 102-108;
5. and proposals for mandated individual coverage in M.V. Pauly et al., Responsible National Health Insurance (Washington: AEI Press, 1992);
6. and in S.M. Butler and E. Haislmaier, A National Health System for America (Washington: Heritage Foundation, 1989).
7. TIAA-CREF offers defined-contribution retirement annuity contracts. See TIAA-CREF, "What Types of Plans Do Employers Offer?" http://www.tiaa-cref.org/finance/what_types_plans_employers_offer.html (accessed 28 April 2006).
8. Multi-employer "Taft-Hartley" plans are collectively bargained by a labor union and multiple employers. According to the Pension Benefit Guarantee Corporation, 9.4 million people are covered by 1,600 multi-employer defined-benefit pension plans. Taft-Hartley plans can also provide portable health coverage. See American Federation of State, County, and Municipal Employees, "All for One and One for All: Taft-Hartley Health Insurance Plans," 2000, http://www.afscme.org/publications/9727.cfm (accessed 11 August 2006).
9. Some defend the current system by arguing that employer-sponsored group insurance uniquely pools the employees, making it easier for high-cost employees to obtain insurance at an affordable premium. Yet if this is the underlying goal, it might make more sense to reduce subsidies to group insurance and increase the subsidies for individually owned, risk-pool insurance whose enrollees actually have been denied coverage because of health problems.
10. An employee in the 25 percent federal income tax bracket facing a 5 percent state and local tax bracket and a combined (FICA) payroll tax of 15.3 percent receives a subsidy of about 45 percent.
11. There is an exception for the self-employed, who are allowed to fully deduct their health insurance premiums but who get no relief from the (FICA) payroll tax.
12. HIPAA prohibits employers from discriminating against employees either in price or in availability of coverage on the basis of health status. In most states, this restriction is incorporated into regulations governing the small-group market, but not the individual market. Therefore, only group insurance satisfies HIPAA in these states.
13. See the discussion in Council for Affordable Health Insurance, "One Solution for the Small Group Market," April 2006, http://www.cahi.org/ cahi_contents/resources/pdf/n133ListBilling.pdf (accessed 11 August 2006).
14. The Massachusetts health plan is an exception to this rule because the insurance is guaranteed issue and community rated.
15. Texas Blue Ribbon Task Force on the Uninsured, Report to the 77th Legislature, February 2001, p. 44, http://www.senate.state.tx.us/75r/senate/ commit/archive/BR/Blue_Ribbon.pdf (accessed 25 August 2006).
16. Insurers impose such rules to avoid being selected against - that is, insuring sick employees only at the time they appear to be sick.
17. Adjustments would be made for age and perhaps health status as well.
18. See E.F. Haislmaier and N. Owcharenko, "The Massachusetts Approach: A New Way to Restructure State Health Insurance Markets and Public Programs," Health Affairs 25, no. 6 (2006): 1580-1590.
19. This is a design originally proposed in J.C. Goodman and G.L. Musgrave, Patient Power: Solving America's Health Care Crisis (Washington: Cato Institute, 1992);
20. and subsequently elaborated on in J.C. Goodman, "Solving the Problem of the Uninsured," Thoracic Surgery Clinics 15, no. 4 (2005): 503-512.
21. Individuals relying on free care, however, are not guaranteed it. If they have resources, they will probably be asked to pay for the care - a characteristic of the current system.
22. Specifically, employers must set up Section 125 plans, through which employees' pretax dollars can be used to pay premiums.
23. See Internal Revenue Service, "Part I - Rulings and Decisions under the Internal Revenue Code of 1986: Section 105 - Amounts Received under Accident and Health Plans; and Part III - Administrative, Procedural, and Miscellaneous: Health Reimbursement Arrangements, Notice 2002-45," Internal Revenue Bulletin no. 2002-28 (Washington: U.S. Government Printing Office, 2002).
24. See J.C. Goodman, G.L. Musgrave, and D.M. Herrick, "Is Managed Competition the Answer?" in Lives at Risk: Single-Payer National Health Insurance around the World (Lanham, Md.: Rowman and Littlefield, 2004), 201-213.