Such mandates are not the only reason employees have benefits they do not need. Employers choose standardized packages for their employees becaues the overhead is much lower than it would be for individually-tailored packages.

After passage of ERISA, states could no longer mandate coverage for companies which shose to self-insure. I haven’t found recent statistics. In 1993, 49% of workers covered by employer-provided health insurance worked for firms that self-insured. As I understand it, liberals in many states are furious about the ERISA laws which prevent them from controlling the lives of others.

The bottom line, therefore, in order to reform the market, the employer’s tax deduction must be removed. It would then cost less to give the employee a cash raise than to provide health insurance, and the market would move away from the foolish structure where the employer provides the coverage ‘free’ so that the consumer overconsumes health care.

1. There is no such thing as an entitlement to other people’s money. There is no right to health insurance provided by other people’s money.

2. Any subsidy is paid directly to the beneficiary, not the provider.

3. No tax deduction to employer; as with subsidy, any favorable tax treatment goes directly to the consumer.

4. Default position is “As little regulation as possible — allow market forces to direct behavior.” Each regulation is reviewed annually and must be affirmatively voted for renewal.

5. No automatic program increases. Each program must be reviewed annually. A vote of both houses is required to renew the program.

6. No deficit spending. If voters are not willing to accept additional taxes, then they are not willing to support additional expenditure. No exceptions.

7. There is no such thing as an entitlement to other people’s money. There is no right to health insurance provided by other people’s money.

–Compare this to the current circumstances where an elderly person is incentivized to deplete his estate in order to get his fellow citizens (Medicaid) to fund his assisted living.

– Exactly! Only people who are really needy ought to receive the largesse of their fellow citizens, and that ought to be voluntary. Obviously it would be billions and billions less than is being confiscated now and turned over to other citizens — that is a very good thing.

Why not? Why shouldn’t people pay for their own routine medical care? What is different about medical care — which consists of goods and services — and any other category of goods and services that we expect routinely to pay out of pocket?

1. Leave us alone! Laissez-nous faire!

John, I think those costs could come down significantly if insurers could compete across state lines and achieve some economies of scale in the individual market. Also, offering a few packages that would offer some flexibility, but not exactly an ala cart menu would bring down costs. Ala cart could be made available, but at a higher cost to cover the higher administrative costs – it would be the consumer’s choice. I think that might also address the issues you brought up in #2.

8. I do not understand why you believe “we” are obligated to ensure everyone has access to health care. Who do you include in that term ‘we”?

If I may add – it’s also important to define what is meant by “health care”, “minimum”, “basic” and “access”.

2. I agree that preferential tax treatment should be eliminated. But I don’t believe that will end employee “lock in”. Despite anecdotal claims to the contrary offered by commentors, few individuals can obtain at comparable rates anywhere close to the coverage they’ve come to expect through employer-provided health insurance.

3. Customized insurance plans would have much higher administration costs per insuree. IMO, individuals or families will still take advantage of group buying power and the standardization that implies.

5. While that is true, the contract between the insuree and the insuror will determine whether such treatment will be reimbursed.

6. I do not understand what you mean by “true health insurance”. Spreading risk across a population is included in many definitions of the word “insurance”.

8. I do not understand why you believe “we” are obligated to ensure everyone has access to health care. Who do you include in that term ‘we”?

2. Contracts

Thanks.

Let’s separate the issues of mandates and group insurance benefit standardization. Those are two different issues, as I see it.

I agree that mandates are wasteful, and that they drive up insurance costs.

Standardization of group insurance packages reduces administrative costs. But it doesn’t cost the employer any more to provide pregnancy benefits to anyone who cannot use them. That’s because actuaries have already discounted the total price to the employer.

What’s really happening with group insurance is group buying power and sharing of costs. Those who use few of the standardized benefits end up subsidizing those who use many of them. But that’s almost always the case with insurance, right?