Universal healthcare & personal choice-the best of both worlds?

Tomas J. Philipson, a visiting scholar at the American Enterprise Institute, has written with other scholars a plan for healthcare reform which he and his co-authors believe ???can unite the country???young and old, sick and healthy, Democrat and Republican???in support of a simplified health care system that improves the nation???s well-being.???

Addressed in Philipson???s report are what he deems the U.S. health care system???s three structural flaws: artificial inflation of health insurance premiums which causes healthy individuals to reduce or revoke coverage, thus driving up prices, rewarding high-volume care rather than high-quality care, and the inadequate reimbursement levels of the Medicaid system.

The approach to healthcare Philipson puts forward is different from both the current system and the proposed Affordable Care Act, and is based on the following four principles:

  • First, allow and encourage insurance companies to charge individualized premiums to consumers that reflect their true health care costs. This moves away from the current approach of offering coarse and relatively uniform premiums to the wide range of individuals seeking insurance (through the use of group insurance or state-level community rating mandates).

  • Second, to ensure that offers of insurance are affordable, there should be government-financed premium supports. The poor, especially the sick poor, gain access to a basic insurance plan at no cost and to more generous plans at significantly reduced costs.

  • Third, eliminate the practical and legal barriers to multiyear (long-term) health insurance contracts.

  • Fourth, abolish the tax preference for employer-sponsored health insurance plans. This subsidy encourages excess utilization of both insurance and low-value health care services.

Read more of the complete report here.