Personal and portable health insurance

President Bush has proposed making health insurance in the U.S. individually-owned, personal and portable, travelling with employees from job to job. It is an idea whose time has come, says John C. Goodman, president of the National Centre for Policy Analysis.

Just because employers pay all or most of the premium does not mean that health insurance must necessarily be employer-specific. As an alternative, why can't employees enrol in health plans that meet their needs and stay in those plans as they travel from job to job?

Some years ago, the National Centre for Policy Analysis and Blue Cross/Blue Shield of Texas proposed a detailed plan to transition from group insurance to personal and portable insurance. This plan could form the basis for President Bush's nationwide proposal.

Among the advantages of portable insurance for patients:
 

• It promises a continuing relationship with an insurer and, therefore, a continuing relationship with doctors and health facilities.
   
• It also promises that if people like their health plan, they will be able to stay in it – without worrying about an employer's decision or a change in employment.
  
  Among the advantages for employers:
   
• Portable health insurance means that small groups are no longer treated as self-contained pools and rated each year based on changes in the health status of their employees.
   
• Instead, their employees will be members of very large pools in which no one can be singled out because of a sudden, large medical expense, and premium increases are the same for all.
   
• Employers can limit their contribution to a fixed-dollar amount, and new hires will know how much the employer is going to contribute to health insurance, just as they know the amount of their salary.
   
• Because the employer's role would be largely financial, in a real sense employers will get out of the "business" of health insurance.
  
  Source: John C Goodman, Personal and Portable Health Insurance, National Centre for Policy Analysis, Brief Analysis No. 543, March 14, 2006.
  
  For text: http://www.ncpa.org/pub/ba/ba543/
  
  For transition plan: http://cdhc.ncpa.org/news/making-health-insurance-portable
  
  For more on Health: http://www.ncpa.org/iss/hea/
  
  FMF Policy Bulletin/ 21 March 2006