Title: Health Care Reform: The Impact of the Regulatory Regime and Cost Sharing
Abstract: Many policy makers and economists support changes to the U.S. tax code to stimulate decreased reliance on employer sponsored insurance. However, the tax code is not the only law impacting the availability and price of group and non-group health insurance. Outcomes from a health care reform designed to expand coverage by replacing group insurance with non-group insurance depend on two closely related policy choices - the regulation of the non-group health care market and the amount of risk sharing. The replacement of the current system by a non-group market with minimal regulation and minimal or no cost sharing would benefit younger healthier insurance applicants over sicker or older applicants. A reform with an unlimited guarantee-issue requirement and community rating would simply mimic the current system. Younger adults who tend to be uninsured because of cost considerations or lack of access to employer sponsored insurance would likely remain uninsured. A reform expanding non-group health insurance markets is likely to include guaranteed-issue regulations, some restrictions on underwriting designed to balance the interest of sick versus healthy insurance applicants and cost sharing either among insurance firms or between the insurance industry and the government. There is, however, no consensus about the desired level of regulation in the new expanded non-group market. Cost sharing between the government and the insurance industry or with the insurance applicants is necessary to make guarantee-issue rules and rate regulations economically and politically viable. Proposals to fund tax credits for the non-group market through cuts in Medicaid will increase the risk pool of applicants for private insurance and complicate the twin objectives of providing health care to both sick and healthy individuals.
Publication Year: 2009
Publication Date: 2009-01-01
Language: en
Type: article
Indexed In: ['crossref']
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