Health Insurance Risk Pooling and Social Solidarity: A Response to Professor David Hyman

Abstract:     
Social solidarity with respect to health care is expressed, in part, through relatively healthy individuals paying higher prices for health insurance in order to subsidize the health insurance of the relatively less healthy. Americans have generally supported this cross-subsidization. However, given ever-rising health insurance prices, there is now significant interest in lessening the extent to which health care risks are shared in our society. This comment seeks to respond primarily to the regulatory federalism proposal put forward by Professor David Hyman, which I argue will unnecessarily harm certain risk-pooling functions of health insurance and therefore undermine social solidarity. The comment begins with a brief look at what risks are and are not currently pooled, and then examines options for expanding health insurance risk pooling. The comment then turns to Professor Hyman's proposal, analyzing regulatory federalism in light of its effect on risk pooling and social solidarity.

Number of Pages in PDF File: 14

Keywords: health insurance, regulatory federalism

JEL Classification: I10, I18

Accepted Paper Series