Americans need a national market for health insurance

According to a new U.S. Census Bureau report, the number of people in the United States with health insurance actually increased by 3.6 million last year; however, nearly three million of them got their coverage through government programmes, says Grace-Marie Turner, president of the Galen Institute.

The slide toward a government-dominated, taxpayer-supported health sector will continue unless the 45.7 million Americans who do not have insurance now are given more opportunities to buy private coverage, continues Turner. So, America is faced with two options:

  • States can lighten their regulatory burdens to encourage greater competition for more attractive and affordable coverage.
  • The federal government can update tax policies to better fit U.S. society.

    Each mandate can be defended, but as the burden increases, fewer people can afford to buy insurance. Yet laws designed to make health insurance more affordable often backfire, says Turner:
  • Many states tell insurance companies they must charge similar rates to everyone; they also force insurers to sell policies to people who wait until they are sick to buy coverage.
  • States should be giving residents more options to buy polices that suit their budgets, not the priorities of politicians.

    Moreover, Congress can do more than simply knocking down the barriers to interstate health insurance, says Turner:
  • It could make health insurance more portable by changing the tax subsidies already going to those who get health insurance at work and turn them into refundable tax credits.
  • This would make the subsidies available to everyone, and help millions of people buy coverage who cannot afford it now.
  • It would also help people keep their health insurance when they lose their jobs or move.

    Therefore, the complex problems in the U.S. health sector are best cured by a bigger dose of market competition, not more government intervention, says Turner.

    Source: Grace-Marie Turner, We Need a National Market for Health Insurance, Wall Street Journal, August 27, 2008; based upon: Carmen DeNavas-Walt, Bernadette D. Proctor, and Jessica C. Smith, Income, Poverty, and Health Insurance Coverage in the United States: 2007, Census Bureau, August 2008.

    For Wall Street Journal text:

    For Census Bureau text:

    For more on Health Issues:

    FMF Policy Bulletin/ 02 September 2008
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