This transition would likely be tougher than you describe, lots of stakeholders have to be accomodated. But the basic idea is excellent. I had never thought much about all the HR people who waste enoumous amounts of company time and money working on these benefits packages. And it sure solves the current "Rush Limbaugh problem."

Gary in Seattle

Actually, the Affordable Care Act allows individual purchasers and employees of smaller companies to buy health insurance through the state insurance exchanges that will start in 2014. In 2017, large employee groups can participate. In the exchanges, people will be able to buy comprehensive plans with no pre-existing condition exclusions, and be able to shop and compare apples to apples, which is impossible today. But that insurance exchange pooling mechanism is absolutely essential. You can't just send individuals out into the insurance market wilderness that exists today and expect them to survive, especially if they have pre-existing conditions. Even experts can't understand the bewildering range of benefits and copays and deductibles and exclusions, etc. Let's do this through the insurance exchange mechanism, which conservative health policy experts like those at the Heritage Foundation used to favor before it became necessary for them to denounce "Obamacare." Contrary to what Mark Trahant says, however, it won't work to let insurers and consumers pick and choose widely in terms of benefits, because then you screw up the risk pool. For instance, male consumers won't want to pay for maternity coverage, and female consumers won't want to pay for erectile dysfunction treatment, and most people won't want to pay for mental health coverage. The every-person-for-himself health insurance model does not work, and no other advanced country in the world would even consider it.

Currently there is a tremendous barrier to entry (and therefore to more competition) in the insurance market: catastrophic care. An insurance company would need to be tremendously large to absorb the cost of a few patients who require very expensive treatment. If the government is to play a role in providing health insurance, the ideal role would be as a re-insurer of insurance companies. This way, more insurance companies would be able to spring up without fear that they could be wiped out in less than a year by a few very sick patients. Likewise, many more companies could afford to self-insure, rather then purchase insurance from other firms. The government could take on a roll much like Lloyd's of London in Britain: the large risk-sharing organization that indemnifies other insurers against catastrophic loss. With more, as well as smaller and nimbler providers, more economies could be wrung out of the insurance system and more choice would be provided for everyone.

It's important to remember not only why the US has employer-provided health care, but also why Europe has government-provided health care. Until the late 1800s, almost all health care in Europe was provided by a giant bureaucracy with tremendous influence in all people's lives: the Catholic Church. Governments sought to appease socialist agitators by taking the provision of health care out of the hands of a quasi-governmental institution and putting in into the hands of a genuine governmental one. One of the reasons that insurance companies are so notoriously difficult in the US today is that they have grown so large, and are so immune to competition, that they have become quasi-governmental institutions themselves.

The European model is as much the result of a historic "mistake" as the American model is. A true free-market model like the one I describe above would be a clean break with both.

Mark, I can not thank you enough for laying out such a radical change in the delivery of health insurance!! Sort of 'single payor' where the payor is the individual and not the employer or taxpayer. Schools, government entities, Boeing, GM, Starbucks, Microsoft, and all other employers should be outlawed from giving out tax free benefits. Health insurance is not a right; it should be purchased in the same way as happens for all other forms of insurance.

Contrary to what dbreneman says, the origin of European national health insurance systems lies in Germany, which under Bismarck established a system of private "sickness funds" for different groups of workers in different occupations and regions. These were not and are not "governmental" institutions, though there is a governmental framework for the system. France, Holland, Japan, and many other countries later adopted the German model, which is not based on a government-run insurer like Medicare or the British National Health Service or the Canadian provincial insurance system. And these continental European systems and Japan retained private health care providers, like in Canada and the U.S., so it's not government-provided health care. Ask the Europeans whether they consider their system a "mistake." Polls consistently show that Europeans and Canadians (and Australians and Japanese, etc.) are more satisfied with their health care system than Americans are. dbreneman is perpetuating myths here.

Home mortgage interest should join health insurance benefits as future non tax deductions...people without health insurance and ones who pay for it with after tax dollars are similar to renters and employees both public and private with generous tax free health insurance are similar to home owners who get the mortgage deduction. It is all a sham, scam, and shame.

Mr. Meyer, I did not mean to imply that the German system is on a par with the disastrous British one. Government is, however the organizing force behind the provision of health care. In that sense, the provision of health care is very much in governmental hands. Does that clear up the mythology?

Actually, that's not true. In Germany, the private nonprofit sickness funds are independent entities, as are the hospitals and doctors, which also are private. That's the same model as in most of western Europe. There is no advanced country where the government doesn't play a major organizing role, including in the U.S., except in the U.S. it's a much more fragmented non-system than anywhere else. As far as Britain, if you read T.R. Reed's good book on health care around the world, you'll learn that Britain has a much better system for providing all-important primary care, which is basically a disaster in the U.S. And the British people are devoted to the NHS. No conservative prime minister, including Thatcher, has dared to mess with it. Health care systems around the world are much more complicated than free-market ideologues like to present, and the research evidence shows that most other advanced countries, including those with government-provided health insurance like Canada, achieve better overall health outcomes and great public satisfaction than the U.S. non-system achieves. So getting back to Mark Trahant's article, it would be a huge mistake to throw everyone into an every-man-for-himself individual health insurance market that has never been tried anywhere in the world except in the fever dreams of free-market ideologues.

It is a rare day I agree with Mr. Trahant, but this essay is precisely what will solve most, if not all, the problems we face today.

I want to insure against what is important TO ME, not what others think I should have.

Bless you, Mark.

The Geezer

Mr. Trahant outlines a lose-lose proposition, except for the (rare) rich and sick person, because:

1) People will tend to seek the cheapest insurance possible, either because they underestimate their need for broad coverage, or they can't afford it. So when catastrophe strikes, they'll be off to the emergency room for care they can't afford. That means either bankruptcy for them, or passing on those costs to others.

2) Health insurance companies will seek to cherry-pick healthy customers, leaving the sick (i.e. expensive) ones alone or dropping people when they become too expensive to insure. Then you've got uninsured/uninsurable people who are - you guessed it, off to the emergency room for coverage, or going bankrupt because they're having to pay all the costs themselves.

There's a reason no other developed nation in the world uses a system like this - because it doesn't work. But there's no doubt the conserva-pundits and "researchers" at the Cato Institute and Heritage Foundation love the idea/ideology behind it.

Having the government act as re-insurer for private insurance companies and self-insured employers would solve both these problems. Please see my comments above (before it got taken off on a tangent).

dbreneman, your reinsurer idea is the tangent. Having a whole bunch of little health insurance companies all trying to cherrypick the healthiest enrolless is a health system nightmare. And you want that backstopped by the "gubmint," with taxpayers on the hook? What kind of free-market idea is that? In health care, a very small percentage of the population accounts for a very large percentage of total health care spending. Having little insurers and employers trying to figure out how to get an actuarily healthy pool is a recipe for disaster. People who understand insurance know that you have to have large pools to have the costs of sicker people balanced out by lots of healthier people. That's not going to happen in smaller pools unless the insurer engages in predatory cherrypicking, which is bad for the entire system. All anyone has to do is take a look at the dysfunctional individual health insurance market in the U.S. to see that this idea of everyone going off to buy their own insurance in an essentially unregulated market is a friggin disaster.

Can anyone of us actually read and understand our medical billings when we've been hospitalized? And if we question whether we really did have such-and-such procedure, whould we understand the explanation for that?

Too much bureaucracy, too many layers. Just like our governements, from Fed to State to County to City.