Guaranteed Renewability and Equitable Tax Treatment of Health Insurance | Economics21

The fundamental hindrance to achieving the goal of pooling comes down to the following policy conundrum: How can policymakers get younger, healthy adults to essentially cross-subsidize older adults with pre-existing chronic conditions? There are ultimately two separate methods policymakers could adopt to tackle this problem: a set of regulation-oriented arrangements that would compel cross subsidies, and a market-oriented arrangement that would establish voluntary cross subsidies.

This market-oriented arrangement of voluntary cross subsidies would be based on guaranteed renewability of insurance and would require a modification of the tax code to extend the tax break for health insurance beyond the employment-based market into the individual market. If that tax inequity were removed, people would obtain guaranteed-renewable insurance while young and healthy, and the pre-existing condition problem would eventually barely exist. This market-oriented arrangement could be superior to the set of regulatory arrangements that have been either tried or suggested to help people with pre-existing conditions.

Source: Guaranteed Renewability and Equitable Tax Treatment of Health Insurance | Economics21

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One Response to Guaranteed Renewability and Equitable Tax Treatment of Health Insurance | Economics21

  1. Beverley Killian Stewart says:

    I really like this idea, Chris. How to we help promote, or encourage facilitation of this idea? Hope you are doing well, one of these days, we really need to talk at length. God Bless.

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