New Issue Brief Offers Framework to Enhance Individual Control of Health Insurance

NEW YORK, NY — With the increase in layoffs sparked by the Covid-19 economic crisis, jobless Americans are scrambling to replace the health insurance that their previous employers once provided—a dynamic which draws further attention to problems that persist even ten years into the Affordable Care Act: employer-sponsored health insurance is not crisis-proof, and the individual market remains inflexible and unaffordable.

In the midst of a national reevaluation of how health insurance should function, a new Manhattan Institute issue brief from senior fellow Chris Pope offers a four-point framework policymakers should consider to improve the flexibility and competence of the U.S. individual market for health insurance. This framework addresses national discontent over rising health insurance costs, offers a vision to introduce greater control and flexibility for consumers, and incentivizes the sort of long-term planning that controls costs and improves health.

The four key principles policymakers should advance to improve health insurance in the U.S and foster resilience against future unforeseen crises are as follows:

1. Put individuals in control of insurance, so that they can purchase cost-effective alternatives to group plans that are not focused on giving them value for money.
2. Make insurance portable across jobs, so that people can keep their preferred plans as they move between employers and across the country
3. Provide discounts for maintaining continuous coverage, to give healthy people a reason to sign up before they get sick, provide an incentive to avoid lapses in coverage, and reduce the average cost of the insurance risk pool.
4. Directly assist the uninsurable, by structuring subsidies straightforwardly as an entitlement, rather than forcing insurers to redistribute by overpricing insurance for people who sign up before they get sick.

Click here to read the full report.