A Better Way Forward: Make Health Insurance Portable

A BETTER WAY FORWARD
MAKE HEALTH INSURANCE PORTABLE

Our health-care system severely limits the “portability” of insurance coverage – the ability to keep one’s insurance after leaving one’s employer. This is due to the nature of employer-based insurance, but also because state regulations and benefit mandates limit interstate portability. This lack of portability results in “job lock,” with workers hesitant to leave their jobs for better ones for fear of losing an insurance policy they like, and discouraging people from becoming self-employed or from retiring if anyone in their family has health concerns. The result is a less agile labor market, which restricts economic growth.

Our health-care system should not pressure people to remain in jobs they would rather leave. A better system would increase the portability of insurance, allowing people to keep their coverage as their work or life circumstances change.

Key reforms for achieving that goal include:

• Allowing civic, community and religious groups to purchase health coverage for their members, giving people the ability to pool together outside of the workplace to buy health insurance they could keep.

• Enabling portable tax-free Health Savings Accounts and catastrophic coverage plans, into which employers could make contributions for their workers but which would be owned and controlled by the worker and would remain with her as she changed jobs or left the labor market.

Reforms like these would begin to make insurance more portable, allowing people greater freedom to make choices about work and life unconstrained by worries about health insurance. They would achieve this without undermining the employer-based insurance system through which millions of Americans now receive coverage, and without adding more layers of regulation and bureaucracy.

More freedom, not less, is the solution to “job lock” and to the worries of countless American families.