A Better Way to Cover Americans


With the State of Rhode Island writing ObamaCare into state law with this year’s budget, it’s worth noting a proposal floating around in conservative circles and the Trump Administration, as Avik Roy articulates here:

Last week, the White House finalized a new rule that allows employers to fund health reimbursement arrangements (HRAs) that can be used by workers to buy their own coverage on the individual market. This subtle, technical tweak has the potential to revolutionize the private health insurance market. …

The administration estimates that as many as 800,000 employers — mostly smaller businesses — will choose this option, expanding health care choices for 11 million workers in the next decade. These employers will benefit from having fiscal certainty over their health expenditures. And workers will benefit from being able to choose their coverage and take it from job to job.

This is the health-care-market fix for which I’ve been advocating for years.  Everybody would get accounts, and employers could put money into them for their employees.  So could the government, as welfare benefits, and so could charities.  So could parents or even concerned members of a community after some surprise accident or illness for a neighbor.

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At the same time, eliminate most mandatory coverages for health insurance so people for whom it makes sense can buy catastrophic coverage inexpensively.  That way everybody is covered for emergencies and nobody ever has a preexisting condition, because everybody has always had some sort of coverage.  At the same time, Americans would be better able to make health care decisions because they’d more often be paying directly for the services they receive and doing the cost-benefit analyses that people several steps removed from their situations can’t possibly do.

Of course, under such a system politicians attempting to buy votes would have to be more direct about it.  They’d be limited to transparently depositing taxpayer money into accounts instead of implicitly driving up costs in our opaque system by requiring insurers to cover certain benefits.  But in a fair analysis, a better, more-sustainable health care system that doesn’t distort the employment market is probably a little bit preferable to enabling corruption in politics.

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