A Blue View: To America, Health Insurance Is A Private Purchase ...

by A Blue View

...  I could continue to describe the health insurance systems of other European countries, or Canada, Taiwan, Japan, South Korea, Australia or New Zealand. We would find that in none of these health systems does the individual’s or family’s contribution to health insurance reflect that individual’s age or health status.

Community rating is so acceptable in these countries because citizens there view it not only as part of a larger social contract, but also as a vehicle for life-cycle economic planning.

The vast majority of citizens in these countries view health care as a “social good” that is to be shared on the basis of need by all on roughly equal terms and is to be financed largely on the basis of ability to pay.

By contrast, Americans have never agreed on a shared social ethic that should govern their health system, as the current debate over health reform has made visibly and audibly clear.

Furthermore, younger and healthier people in these countries realize that, but for the grace of God, they might become chronically ill only a few years hence and that, in any event, one day they, too, will be older and sicker. By paying more than their actuarially expected cost for health insurance, young and healthy people in these countries join a club, so to speak, that offers them a valuable call option. That call option allows them to procure at age 55 health insurance at a premium much below their actuarially expected cost.

By contrast, Americans have been taught that health insurance is largely a private consumption item purchased year to year and customized to the individual’s circumstances . Indeed, the private health insurance industry in this country has never been able to offer individual Americans the kind of life-cycle health insurance citizens in virtually all other industrialized nations take for granted. With the exception of Medicare, all health insurance in the United States is basically temporary.

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