Of particular intrigue is Sebelius’s response to a question on insurance portability:
[Sebelius] also noted the nationwide policies when asked about the difficulty of maintaining coverage after moving to a new state.
“The health care law requires national plans be offered in each Affordable Insurance Exchange in every state and will be available to both individuals and small employers,” she said.
Sebelius tries to shine light on the requirement in the Patient Protection and Affordable Care Act (PPACA) that exchanges offer at least two national health insurance plans. Those plans might certainly provide some security to consumers, which is commendable. However, she didn’t highlight what the health bill could have done to provide even more freedom and reassurance to consumers, who are largely still subject to the whims of their employers.
Health exchanges are a positive component of the law (though the regulations placed on them are burdensome), but only some consumers will gain access to them. Most (below age 65) will still obtain insurance from their employers. PPACA did nothing to move us away from employer-provided health insurance. In many ways, it even expanded the influence that employers have over our health insurance.
In a more perfect, simpler world, Sebelius would have answered something along these lines: “The healthcare law broke our chains of bondage to employer-sponsored health insurance provision and provided a tax credit available to all. People can take their tax credits and use them in the new exchanges to purchase a plan of their choice, many—even most—of which are available nationally since the bill promoted interstate competition.”
Moving away from the employer-based provision of insurance would be exceedingly beneficial. One of the most-discussed ways to do that is to close the tax exclusion on employer-sponsored health insurance, which is worth about $260 billion annually, and to replace it with a tax credit available to all individuals and families to purchase health insurance. AEI’s Joseph Antos and Thomas P. Miller have each discussed this proposal previously (Antos here and Miller here and here with James C. Capretta).
This idea is neither new nor partisan (see the proposed Healthy Americans Act from 2008, for example). Consumers would have more control, freedom, and securityto obtain health insurance. The government could more accurately manage how much money it injects into the health sector. And we would avoid the unfortunate gaming that will soon ensue as employers navigate PPACA’s hurdles and requirements (see this recent post from Avik Roy for more on this point).