First, in a rich country with an employer-based system, firms should have to provide a basic health insurance plan to all employees and their families...
Second, all but the poorest among us have to get used to paying a greater portion of routine medical bills out of our own pockets. It should be no surprise that when something looks as if it's free, people consume too much of it -- and don't bother shopping around for the best value.
Should the federal government require all Americans to buy private health insurance?
...[mandatory health insurance] offers a way out of the dysfunctional employer-financed third-party-payer system that is so grievously distorting our current health insurance system. Employers would eventually devolve responsibility for health insurance to their employees by giving them the money the companies currently pay out to insurance agents. Employees would then have a strong incentive to shop around for the best health care deals, putting pressure on insurance companies to keep costs low.
There are essentially only two ways to overcome this and achieve universal health insurance. One is to adopt a single-payer, government-run system, which is the norm in Canada and most of Europe...
The other -- and far more promising -- path to universal coverage is to approach health insurance as we approach car insurance: Make it mandatory. In essence, all Americans should be required to purchase their own health insurance from among competing private providers, with the government providing subsidies to those who need them.
Of course, I continue to believe that the path to health care reform is blocked by mental illness.
For Discussion. Suppose that the government were to mandate catastophic health insurance. In what ways would this provide incentives for better resource allocation in health care and in what ways would it not do so?