A Private/Public Partnership for National Health Insurance

Health policy researcher Jonathan Gruber addresses what he sees as two failings of the current health system within the context of today's political environment. Gruber believes that the employer-sponsored insurance approach, which provides coverage to more than 90 percent of the privately insured and two-thirds of the nation's nonelderly population, is seriously flawed because it leaves people who are unemployed, are self-employed, or work in small businesses without an efficient pooling mechanism in which to buy affordable coverage. And while publicly subsidized programs extend coverage to the elderly, poor children, and certain other vulnerable populations, major holes remain in the public safety net, leaving millions of Americans beyond reach of coverage.

To address these issues, Gruber proposes to build on the voluntary, private system in place today while "rationalizing" public safety net programs to ensure broader coverage to needy populations. He proposes a significant redistribution of federal health outlays, seeks to level the playing field on which individuals purchase insurance, and tries to harness the powers of competition to address rising health care premiums for nearly all Americans. Using state-based purchasing pools as the plan's foundation, Gruber tries to address certain problems that he believes exist in the current employer-provided insurance system.

These problems include high uninsured rates among Americans working for small businesses, "job lock," which leaves workers stuck in unsatisfying jobs for fear of losing coverage, and the inhospitable environment for higher-risk individuals and others in the nongroup market who pay significantly more for coverage than do employees in group plans. Gruber's reforms would not provide universal coverage, but he predicts that almost all U.S. families would be able to obtain coverage for 10 percent of their income or less. He also acknowledges that his plan would require significant federal expenditures to help provide subsidies to the low- income insured. But he uses a voluntary and private system to extend insurance to millions of uninsured, rather than advocating a major public expansion.