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Commentary

Employer Sponsored, Personal, and Portable Health Insurance
John Goodman, Health Affairs, 12-1-06

Goodman explores current models for creating individually owned and portable health insurance policies, and calls on Congress to clarify tax issues that may be slowing the creation of more such portable policies.

Personal and portable health insurance is an idea whose time has come. The advantages to employees are obvious. There are also advantages to employers. With defined-benefit contributions, employers could get out of the health insurance business and specialize instead on those activities where they have a comparative advantage. Employers could compete for labor based on the work skills of potential hires, unburdened by worries about undisclosed, costly illnesses. People could seek employment based on their talents and job opportunities, rather than on the basis of health insurance benefits.

The difficulty is in implementation. Apparently, much can be done without a change in federal law, as demonstrated by the reform in Massachusetts and the opportunities afforded by HRAs. Congress could make the transition much smoother, however, by clarifying when and if employers and employees can purchase individually owned insurance with pretax dollars.



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