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Free market zealots have been saying for decades that tying health insurance to employment is a horrible system. They would also point out that universal health insurance is not the only alternative.


I'm curious - what are the alternatives?


Legal interstate insurance sales, high deductible insurance, HSA's, Removal of regulations which cause de facto Medicare price controls...


Won't employers still offer health insurance in that case? A group risk pool is still the best way to offer insurance, and large corporations are de-facto the only way to produce a risk pool that doesn't have large adverse selection effects.


Health insurance is a tricky business, since claims are made much more often than against other types of insurance (like renters insurance). As an insurer, in order to have a sustainable business, your risk pool must be more valuable (either in terms of people or prices). If it is possible for insurance prices to drop the point where individual policy purchase is cost competitive with premiums you'd pay via an employer, the competitive advantage of employer provided health care quickly diminishes.


The main problem I see is the adverse-selection problem: if it's not via a large group pool like a large company, then there is likely to be significant correlation between poor health and higher insurance-purchase rates, which will in turn drive up prices. In the individual market, if I'm healthy vs. if I fear I will have imminent health problems, I'm more likely to buy insurance in the 2nd case. But if you work for IBM, everyone gets insurance, uncorrelated with their health perceptions--- so insuring IBM is probably a better deal overall, because the risk pool doesn't select for worse risks.




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