Daily News Updates - Health Insurance News

Defining the Health Insurance/Care Chasm, Pt.6

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In any case, a shift is expected from employer-based health insurance over to private health insurance. The amount of shift will determine the amount of risk-sharing erosion. The loss of risk sharing found in the private health insurance industry creates the struggle for those who need coverage the most – the sick and those over 40 years of age. Those over 40 will have already paid their dues ahead at the time they were younger. They will not be able to recover their up-front investment, if moved over to private plans. This is well considered by the Democratic candidates, who are striving to bolster the group health insurance plans by not only keeping the employer incentive intact, but also to provide further subsidies to assist and to penalize those employers who choose not to help out.

On the other side of the coin are the Republican “Individual Freedom Ideologists”, including Jonathan Gruber, the prominent health economist. They believe it to be “more fair” to shift the tax credit from employers to individuals. Perhaps it’s only coincidence that this favors the more “affluent workers” who can afford private health insurance plans while penalizing lower-income people who depend on the lower-cost employer-provided risk-sharing health insurance plans. Everyone seems to agree, at least, that a gamble is inevitable. They also agree that this method can only work if there are also safeguards to ensure more risk-sharing provision in the new private health insurance plans than there are now. The “Community-Wellbeing Ideology” Democrats believe that risk sharing is essential. The “Individual Freedom Ideology” Republicans may only see this as a means to a different end. Pure free-market competition rules it out.