The Truth about the Individual Market, Part Two

So, what is the problem with the individual market? As explained in a previous post, premiums are lower, administrative costs are similar, there is somewhat more competition, and most applicants who are rejected can find coverage in a risk pool, or would be able to if the pools had more financial support. Why does it continue to be the ugly step-child of the health care system?

The answer is simple: it isn’t subsidized.

Every other form of insurance coverage gets massive subsidies. Obviously Medicare and Medicaid, being government programs, get most of their funding from taxpayers. Government spending on Medicare was $555 billion in 2011 and $387 billion on Medicaid in 2009. Employer-sponsored health insurance is also subsidized — to the tune of over $300 billion a year, according to the Congressional Research Service (CRS). This is because the value of coverage provided by the employer is “excluded” from employees’ income. Unlike wages, employees escape both income taxes and payroll taxes on this benefit. Even the uninsured are subsidized. The Kaiser Family Foundation found that, while the uninsured paid $30 billion for their own care in 2008, they incurred another $56 billion in costs, three-quarters of which was compensated for by government.

Only people who buy their own coverage in the individual market get no tax break whatsoever. Actually, even that isn’t quite true. In recent years the self-employed have been allowed to take a deduction of their health insurance premiums from their income, provided they make at least enough self-employment income to cover the expense. I haven’t been able to track down the value of this tax break, but because they don’t get to avoid the payroll tax the subsidy for the self-employed is still less generous than the complete exclusion from income of employer-sponsored coverage.

So who is left? Only those people who do not get coverage on the job, who are not self-employed, and who buy individual health insurance. These are the only people in America whose health insurance is not subsidized by the government.

Who are these unfortunates? They tend to be people of lower incomes. They may be unemployed or working only part time. They may be early retirees. If they are working, they are likely to be in low-paid jobs like retail clerks in small grocery stores, gardeners, busboys in restaurants, and the like.

Somehow the government has never seen fit to extend to these folks the kind of health insurance support the rest of us take for granted. Say what you will about ObamaCare, but for the first time in history it will provide some “premium support” to this segment of the population.

Unfortunately, ObamaCare leaps over many less drastic steps that might have solved the problem without the wrenching contortions imposed by this law. We might have, for example, improved the individual market without a mandate.

This might have been done simply by extending the same sort of subsidy to people who buy their own coverage as we give to those with employer-based coverage. Or, because the tax treatment of employer-based coverage is extremely regressive (higher-income people get more benefit than those with lower incomes), we might have reformed the whole thing to extend the same dollar amount to all who purchase health insurance. See John Goodman’s recent post on this issue. Or we might have provided a sliding scale subsidy to all who are covered, so that lower-income citizens get more help than those with higher incomes.

But let’s assume for a minute that all private health insurance is treated the same way for tax purposes, whatever that treatment might be. What would happen then?

For most people nothing would change. Employers who find value in providing coverage would continue to do so. These might include companies in very competitive labor markets, or companies that are quite large and able to effectively pool their own risks, or companies with strong commitments to improving the health of their workforce through wellness programs and the like.

But, many other employers do not benefit from providing coverage. They may not have expertise on staff, or they might have high turnover, or be in relatively low-wage industries where cash wages are more attractive than insurance benefits. These companies could stop providing health insurance (many already have) and contribute to the cost of coverage for their employees instead.

The employees would no longer be disadvantaged by the tax code because the same tax benefit would be available whether they secured their own coverage or got it from the employer. This would be particularly beneficial for two-income families. They would be able to merge the resources of two employers into a single program for the entire family.

But the greatest benefit would accrue to people who currently struggle to maintain their individual coverage. They may be only marginally attached to the workforce or work in jobs where the employer has no interest or few resources to finance health care. They might also be retired or physically unable to work. In all of these cases there would be tax support available that wasn’t there before.

How would the insurance industry respond?

This is where our scenario gets really interesting. Let’s assume that one-third of the current employer market switches to individual health insurance, in many cases with a contribution from the employer along with a tax credit from the government.

That would mean 50 million new customers in the individual market. Most of these people would be well-subsidized and relatively healthy since they are at least able to work. Would that be an attractive market? You betcha it would!

Suddenly the individual market would not be confined to the handful of people who simply cannot qualify for employer-sponsored coverage — people with sketchy work and health histories and dubious finances. Suddenly there would be a very large number of potential customers who are gainfully employed and financially secure. The insurance industry would be eager to enroll them.

The industry would immediately take several steps to gain a share of this attractive market;

  • It would simplify the enrollment process to avoid alienating prospective customers.
  • It would design benefit programs to be more appealing to specific market segments.
  • It would start advertising directly to consumers, much as the auto insurance industry does today.
  • New and innovative competitors would enter the market.
  • It would relax underwriting restrictions because the cost of underwriting would not be justified by the risk profile of the pool of applicants.

The last point needs to be explained a bit. As we’ve said, the current pool of applicants for coverage is very small and tends to be financially insecure and often of poor health. Carriers are cautious with this population because a handful of expensive people can have a large effect on the small enrollment base and the proportion of high risks is greater than in the general population. It is worth the expense of medical screening to protect the enrolled population from the cost of a few high-cost cases.

Once the pool of applicants is more like the general population it is no longer worth the cost of screening 100% of the applicants to keep out the very small number of high risks. Medical screening also tends to alienate the good risks the company would like to attract.

There might still be a very simplified health statement required, but this might be confined to a checklist of ten (or so) questions looking for active cases of cancer or heart disease. These applicants would be referred to the high-risk pool. Every voluntary insurance market has some form of high-risk pool, usually referred to as a “residual market.”

This simple change in tax policy would lead to a much more competitive and innovative insurance market, and would make health insurance coverage far more affordable to people not benefitting from employer-sponsored care.

It could lead to expanded insurance coverage as ObamaCare hopes to, but with far fewer regulations, mandates, and complexity, and much lower system-wide costs.

Comments (32)

Trackback URL | Comments RSS Feed

  1. brian says:

    good follow up post.

  2. Patty says:

    WOW, you are 100% right about the only people in America whose health insurance is not subsidized. I have been one of them since 1997, due to Fibromyalgia taking me out of the normal workplace.

    “So who is left? Only those people who do not get coverage on the job, who are not self-employed, and who buy individual health insurance. These are the only people in America whose health insurance is not subsidized by the government.”

    “Who are these unfortunates? They tend to be people of lower incomes. They may not be unemployed or working only part time. They may be early retirees. If they are working, they are likely to be in low-paid jobs like retail clerks in small grocery stores, gardeners, busboys in restaurants, and the like.”

  3. Ken says:

    Agree totally. This is right on.

  4. Joe S. says:

    Good post.

  5. David says:

    The question is why hasn’t, or how can, this message gain traction in the popular press, political debate and public policy. If we “follow the money” who would be harmed by such a change? There must be a powerful constituency weighing against such a common sense solution. Any ideas?

  6. Devon Herrick says:

    Greg makes a valid point: it’s hard to compete with free (or reduced) premiums. A recent paper in NBER looked at why health insurers often turn down bad risks rather than offer applicants a policy with a premium high enough to exceed expected costs. In a nutshell, the answer was (more or less) that in the presence of bad risks, expected costs are hard to quantify. Yet, insurers are able to do with group plans. If subsidized groups plans weren’t available, there would be a much bigger market for individual plans. Without the bread & butter group plans, insurers unwilling to sell individual policies would find it difficult to stay in business if they ignored the individual market.

  7. Patrick says:

    Good points Greg,

    However, Obamacare was never about improving healthcare – it was simply a step toward the Single Payor RATIONED system to control people’s lives that the Democrats want. They used the insurance industry as a ‘convenient villian’ to get it passed by a measly 3 people out of #300 mil. No one likes insurance – who wants to pay for something you hope not to use? It was an easy sell!

  8. Dennis Byron says:

    You write:

    “In recent years the self-employed have been allowed to take a deduction of their health insurance premiums from their income, provided they make at least enough self-employment income to cover the expense. I haven’t been able to track down the value of this tax break, but because they don’t get to avoid the payroll tax the subsidy for the self-employed is still less generous than the complete exclusion from income of employer-sponsored coverage.”

    Hopefully an accountant will help you out with this. But it is deducted from the total on the front of 1040 before you calculate the tax. You’re right that is not deducted on Form C but I think where it is deducted is just as good. Also if you did not make enough self-employed — e.g., I retired early in the tax year — to deduct it all on the front of 1040, you deduct the remainder on Form A. (I admit, I along with Secretary Geithner, am totally dependent on what TurboTax told me to do.)

  9. Dennis Byron says:

    You implicitly ask the question “why does no one care about this?”

    I can’t speak for the rest of the country but in Massachusetts, no one cares because it is such a small portion of the market.

    Before RomneyCare, only 40,000 people out of 6,500,000 were covered by such policies (of which there were 26,000). And Massachusetts had guaranteed issue. At its peak around 2000 about 100,000 were covered. The number dropped in half because the prices were high… because there were so few people. RomneyCare gave these 26,000 policy holders the same price as small group policy holders (covering 10% of the market) paid. In other words it eliminted the individual market in Massachusetts. However the number of individuals covered still only is about 80,000, no where near its peak.

    Basically it’s a market no one cares about because it is small (except Professor Gruber of MIT who uses this half a percent of the overall Massachusetts market as his proofpoint that RomneyCare works… but then he screws up the statistics).

  10. Ron Bachman says:

    In Georgia we are proposing a state income tax deduction (roughly a flat 6%) for all individual comprehensive Major Medical policies (at least $1M lifetime benefit and a deductible no greater than allowed under HSA eligible plans). We already have a state tax deduction for HSA eligible plans (passed in 2008). We are also proposing that an employer can use HRA’s to create a defined contribution plan and provide the convenience of list billing without establishing a group plan made up of individual policies (othewise in Ga. this would establish guaranteed group issuance). These changes along with others (see http://www.georgiahealthreform.com) are what states should be doing in preparation of the SCOTUS ruling ObamaCare unconstitutional. States can do alot without waiting for WDC (Reps or Dems to make national policy). Of course, treating individual policies like group for federal taxes would be the single item only they can take.

  11. Don Levit says:

    The individual market has had years to design innovative products.
    The big wake-up call was in 1986, with Blue Cross being stripped of its not-for-profit status for evolving into their for-profit competitors.
    New 501(c)(3) and (c)(4) insurers should have flurished, providing cutting edge products that would eventually have dismantled the group market, giving people affordable, permanent, individual coverage.
    Greg gives too much credit for an industry that could have built the individual market through the natural decline of group coverage.
    Don Levit

  12. Patty says:

    Regarding David’s comment about “follow the money.” Obamacare is championed by self righteous fools, who perceive that Obamacare is politically correct and thus beyond reproach. There is no changing their minds because their minds were made up in advance.

  13. Linda Gorman says:

    @Dennis Brown–

    Massachusetts officials destroyed the state’s individual market by adopting the 1996 Non-Group Health Insurance Reform Act. This limited underwriting and pricing of individual insurance. Two years after the law passed, 20 firms had withdrawn from the state and a number of others stopped writing new policies.

    Pretty good strategy–take a useful product, regulate it until no one wants to either buy or sell it, and then years later people can ignoring the damage by claiming that this doesn’t matter because it is “a market no one cares about because it is small.”

  14. HD Carroll says:

    While I have understood completely for decades the unbalanced situation that exists in the tax situation between group and individual health insurance, and agree that the differential needs to be eliminated one way or the other (keep in mind that extending the break to everyone would cost the treasury billions – the very reason that HSAs aren’t available to people without special market HDHPs), do not expect it to be that easy for people to suddenly be able to purchase individual insurance. You have to be insurable, and young, to be able to get or afford such insurance. You and John are both always very quick to put words, or actions, into the mouths of insurers, but you do so without actuarial support for a lot of your ideas, more like wishful thinking. Without a true “stick” that punishes young healthy people who choose not to purchase insurance when they are in a position to do so, the “pool” you suggest will suddenly be storming the gates of individual insurance writers would dwindle to the dried up creek bed that currently exists. John also seems to think it is fine for older people to have to pay more for health insurance, presuming they are perfectly healthy – and yes, it is totally actuarially justified. The problem is it isn’t affordable. Moving to an individual market where the product is essentially “YRT” totally unravels the group/pooling principle that lies behind the success of employer based group insurance. What would be needed in such an environment is an American version of the German “entry age level (well, sort of)” health insurance with cash values, etc. The problem is that Medicare throws a massive monkey wrench into the works, and no insurer is really happy to insure medical expenses for the entire life of a person entering at, say, age 35 – not in an environment where medical trend has the tendency to outpace general inflation more often than not. I don’t have a problem with the “individual market” solution, it’s just that the current market can’t handle it, and the market you envision is not actuarially likely.

  15. Frank Timmins says:

    You are right Greg. I think the most significant point is

    “Once the pool of applicants is more like the general population it is no longer worth the cost of screening 100% of the applicants to keep out the very small number of high risks.

    There are two basic reasons that people do not have health insurance:

    (1)Cost – Either one can’t afford it or one feels he
    doesn’t need it (young and indestructible)

    (2)Uninsurable – Sometimes this is through no fault of
    the individual, and sometimes the ultimate
    result of the second part of (1).

    In any case the problem can be solved (as you suggest) if the carrier’s risk of being selected against is significantly reduced. It does not have to be completely eliminated (via mandate), but the combination of a credit/voucher system would make the carrier risk almost irrelevant leading to relaxed underwriting and almost complete access.

    Making individual and group coverage tax neutral is necessary to complete the system.

  16. Dennis Byron says:

    @linda gorman

    I am not claiming that Massachusetts’ individual market is small “years later;” that’s just a fact. (I think the numbers come out of your report but they may have come directly from the DOI.)

    The individual market represented less than 2% of the market around 2000 (was it much bigger in 1990 or before the 1996 law?). Then it fell to under 1%. That was probably helped by the 1996 “reform” but that could not have been the prime driver. The numbers were so small already that the market could not support 20 suppliers.

    Now even though individuals have smaller premiums than they would have had before RomneyCare because of the merged market and even though they still have guaranteed issue, only about 1% of the residents participate individually (as you know, technically the individual market no longer exists in Massachusetts).

  17. Greg Scandlen says:

    Dennis Byron —
    I looked into this just before RomneyCare was passed. Connecticut’s premiums were about half of Massachusetts. The state could have solved much of the uninsured problem if it had simply allowed residents to buy coverage next door.

    HD Carroll —
    Of course it would cost billion, all insurance subsidies cost billions, but why single out this population as the only people in America who are unsubsidized? Do you hate busboys?

    Ron Bachman —
    Bravo to Georgia. Every state should allow employers to use HRA money to help employees buy individual coverage.

  18. HD Carroll says:

    Greg – I started my post by stating that I am in favor of eliminating the imbalance, one way or the other, and merely observed that the reason it doesn’t happen is that treasury will lose too much money if they equalize the situation by giving the same extent of tax break to just anyone. And if they did, it wouldn’t solve the insurable and age issue, no matter how cost effective it becomes to underwriter differently. It really has nothing to do with that busboy at the restaurant the other night, and I really can’t figure out how you know about that.

  19. Greg Scandlen says:

    ROTFL — The walls have eyes!

  20. Henry GrosJean says:

    Interesting post. Interesting discussion. Unfortunately, none of the ideas will come to fruition as they are too logical.
    And, doesn’t MA have some of the highest individual health isnurance rates in the country?

  21. Don Levit says:

    HD:
    You are absolutely correct.
    In life insurance, YRT rates go up every year.
    In fact, many YRT policies show premiums at age 80, if started early enough, that is higher than the death benefit!
    By proving health, the 50 year old who is healthy has a lower premium, a much lower premium, than the healthy 40 year old who is now 50, has held the YRT life policy for 10 years, and paid all those premiums – versus the 50 year old just starting who has paid in zero!
    The same scenario works in YRT health insurance.
    That is why reserves are needed, which are available to the insured only to pay up his premiums.
    Your idea of community rates is what we are working on with Milliman, fully community-rated.
    And, instead of cash value owned by the insured, it is owned by the insurer, but does provide paid-up coverage “as if the cash value was owned by the insured.”
    Don Levit

  22. Linda Gorman says:

    Individuals have smaller premiums under RomneyCare than they would have had without it? How do we know that?

    Evidence from other states suggests that when people use their own money to purchase policies in the individual market they prefer higher deductibles than are allowed by Massachusetts law, a different pattern of financial risk reduction, and networks that are not interrupted by state borders.

  23. dennis byron says:

    @ Linda Gorman

    Sorry but I thought you were involved with Gorman Acturial. The answer to your question is here in this 2006 analysis (http://www.mass.gov/ocabr/docs/doi/legal-hearings/nongrp-smallgrp/finalreport-12-26.pdf) with follow-up in many places in 2009-2010 (see page 21 here for a summary http://www.mass.gov/eohhs/docs/dhcfp/cost-trend-docs/final-report-docs/health-care-cost-trends-2010-final-report.pdf, particularly look for anything that explains the premiums paid by individuals in the so-called merged market vs. individuals in the “residual non-group market.”

    @ Henry

    yes, Mass. has among the highest if not the highest healthcare insurance premiums of all types (individual, small group, large group, Medicare supplement, self insured) in the country. We also have the highest or are among the highest in local/state taxs, heating bills, public and private education costs, hotel room charges, food prices, etc. etc. See a trend.

    @ Greg

    Interesting what you say about Connecticutt vs. Massachusetts. Did CT also have only about a percent of its population covered by such insurance? Were there 20 market participants in CT as someone else noted was the case for Massachusetts? Maybe the fact that CT is home base for so many big insurers helps? (It’s hard to believe it’s due to CT vs. Mass. legislators and policy makers because CT is as blue as Massachusetts.)

  24. Bob Hertz says:

    Don Levit nails it as usual.

    I work in the insurance industry, where a sardonic actuary once described term life insurance as ” a product that is actuarially designed not be be in force at the time of death.”

    I fear that tax reform may not be enough to overcome the self-interest of my industry, which wants to write short term coverage.

    In the area of life insurance, the Social Security system rather quietly provides two safety nets for those who strike out in the private insurance arena.

    If a breadwinner dies and their children under 18, Social Security pays a benefit to the surviving spouse for that child. The benefit is monthly, but it acts as life insurance all the same.

    If a senior citizen dies, any living spouse (or ex-spouse) with modest earnings can qualify for a benefit for the rest of their lives. Again, a safety net form of life insurance.

    I would like to see the same thing in health care, for example a universal tax-supported catastrophic policy. Milton Friedman, Martin Feldstein, Arnold Kling and Avik Roy are just a few conservatives who have endorsed this.

    This would be a backstop in case indvidual insurance fails, as I think it will.
    And it is far far preferable to a mandate.

  25. Patty says:

    A universal tax-supported catastrophic policy would work, I absolutely know it. Preferable to the hamfisted policy & unintended consequences of Obamacare. Why did’t the president surround him with smart people?

  26. Nate Ogden says:

    “Only people who buy their own coverage in the individual market get no tax break whatsoever.”

    This is incorrect and has been for over 3 years now. Individual insurance premiums can be payroll deducted just like employer sponsored deductions. They are called Individual Premium Reimbursement Accounts, work just like an FSA and have been around. I have clients that have been deducting their individual premiums for years.

    “Who are these unfortunates? They tend to be people of lower incomes. They may be unemployed or working only part time. They may be early retirees. If they are working, they are likely to be in low-paid jobs”

    In my 20 years of experience selling individual policies they are not likly in low paid jobs. The overhwelming majority are middle to high income. It is becuase they have money they are looking to protect their assets. The low paid workers I quoted, many of them, are usually content to rely on public plans or just let the bills pile up. If your credit already sucks who cares if you add a few medical bills to it.

    “because the tax treatment of employer-based coverage is extremely regressive (higher-income people get more benefit than those with lower incomes),”

    There are four discrimination test to protect against the tax benefit being regressive. It’s a subjective statement but this concern is addressed in the tax code and plans are required to pass the test every year. If high incomes benefit to much then the plan is out of compliance and everyone loses their tax savings.

    “As we’ve said, the current pool of applicants for coverage is very small and tends to be financially insecure and often of poor health.”

    All my years of experience diasgrees with this statement. There are 17 million people currently with individual insurance. There are 50 million more uninsured, 90% of which are by choice. Roughly 20-25% of that 50 million make over 75K per year and choose not to buy insurance. The majority of the uninsured do so by choice because they are healthy and don’t need expensive insurance. The current market is already larger then all but a handful of carriers, it doesn’t need to be any larger to be acturial sound or significant. There are easily 30 million people in good health uninsured.

    “Once the pool of applicants is more like the general population it is no longer worth the cost of screening 100% of the applicants to keep out the very small number of high risks. Medical screening also tends to alienate the good risks the company would like to attract.”

    No underwriter would ever agree with this statement. We still underwrite in the group market and it has 150 million people covered. The size of the market has ZERO to do with the need to underwrite. It’s the individuals ability to select when to insure. Group insurance has less underwriting because individuals have limited opportunities to enroll, this guarantees both healthy and sick people enroll. This is proven by the fact that group insurance has particiaption requirements. If a group is enrolling less then 75%, with most carriers, they will be declined. In the individual market carriers do not have this protection so they will always require more underwriting.

    http://www.irs.gov/pub/irs-drop/rr-61-146.pdf

    This is the revenue ruling showing individuals can enjoy the same tax savings on individual policies as group policies.

  27. Bob Hertz says:

    I think that one of Nate’s numbers is a little off. He implies that up to 12.5 million people in the USA make over $75,000 a year and choose not to buy health insurance.

    I too have sold health insurance, and granted that salaries are lower in outstate MN, but I run across almost no one in this status. Almost everyone here who makes over $75K has a good job with a larger corporation, and the vast majority of the self-employed clear less than $75K in net income.

    But this is not a major item.

    The real challenge is this:

    If we allow health insurance to be a voluntary purchase –where the terms of trade must benefit both parties –then health insurance will be no more universal than voluntary life insurance or voluntary disability insurance or voluntary long-term care insurance.

    Some people will never buy it, and others will buy it but not have it in force at the time of a claim.

    If this bothers us as a nation, that is fine. We can relieve our concern in two ways:

    – regulate, mandate, subsidize, and supervise the insurance markets;

    – or provide federal insurance as a safety net.

    I vote for the safety net, and I am willing to pay some taxes to accomplish this. The person who makes $75K and buys no insurance should probably pay more taxes than I do. The person who makes $20K should pay some taxes too for the safety net.

    One of John Goodman’s proposals about funnelling tax credits to safety net providers was a good way of accomplishing this.

  28. Patty says:

    Once again, I vote for federally insured safety net for catastrophic medical costs. This is the best plan I have ever seen. Our next president needs to abolish Obamacare and then surround himself with wise people, who can implement the safety net. Unfortunately, Obama is too proud to undo the damage he has done, and then to implement a program that will work.

  29. Nate Ogden says:

    http://blog.american.com/2009/10/1-of-5-uninsured-lives-in-household-making-75000-a-year/

    “The chart above shows the household income levels of those 46.3 million uninsured Americans (from Table 7 in the report). There are 9.7 million uninsured Americans living in households making $75,000 per year or more, and this represents more than one out of every five uninsured (21 percent of the total). There are 8 million Americans without health insurance in households making between $50,000 and $75,000, representing 17.3 percent of the uninsured. With those two groups combined, 38.3 percent of Americans without health insurance (17.7 million people) lived in households with $50,000 or more of household income in 2008.”

    This was over 3 years ago and only counts people who honestly claim to be making that much. From my time in Las Vegas with valets and waitresses making 6 figures a year we all need to be aware income reported to the IRS is only a fraction of the picture.

    If those making 75K now are not buying insurance and millions are paying only a fraction of the taxes they should how do we accomplish bringing them into the fold.

    Before we going screwing up the system further for those who are doing the right thing why don’t we actually go after those not paying taxes? This is just as bad as all the Medicare reformers paying lip service to addressing the fraud and waste….after they double the number of enrollees or open it to everyone. Just trust them, they really will.

    Our safety nets are what is bankrupt, I don’t think they should add another single enrollee until they are fixed. In the private sector when an insurance company is insolvent they are forbidden from marketing or selling new business until they fix their problems. We should do the same thing with Medicare and Medicaid

  30. Greg Scandlen says:

    Thank you all for your comments. As I hoped, you have opened the door to a great discussion. But instead of keeping it at the end of this post, I want to give these comments their own post, which I will do next week.

  31. Frank Timmins says:

    Bob Hertz, there is actually a third option. The problem with a “federal safety net” as a primary catch all for those who (for whatever reason) do not access the “voluntary” system is that the net will compete with the commercial market. That will eventually place us right back at square one with regard to governmental control of healthcare.

    The third option would be to place as many Americans as possible into the market. In other words, make them “buyers” of healthcare (and insurance), not healthcare wards of the state.

  32. Bob Hertz says:

    We are all wards of the state when it comes to firefighting. You do not need to buy fire insurance to call 911. The cost of emergency responders is spread across the entire population, and this has been true in 99% of America’s medium and large cities for about 120 years.

    I do not mean to be flippant, because it is very hard to just say ( as I do) that emergencies should be publicly funded but chronic care and longer hospital stays should be funded by insurance. A great many of the most expensive long-term hospital patients start off in the emergency room.

    Still, I am convinced there is a place for public funding. Actually I think it was Michael Tanner who suggested that we should look for ways to provide health access without insurance.

    A fair number of the uninsured are too disorganized and too broke to ever stay with a health policy for very long. What they need are public hospitals and sliding-scale community clinics — not high deductible insurance policies which is all they can afford, and which they will not keep in force.