Abstract

http://ssrn.com/abstract=1851852
 


 



Three Models of Health Insurance: The Conceptual Pluralism of the Patient Protection and Affordable Care Act


Allison K. Hoffman


University of California, Los Angeles (UCLA) - School of Law

May 11, 2011

University of Pennsylvania Law Review, Vol. 159, 2011
UCLA School of Law Research Paper No. 11-19

Abstract:     
What risks should health insurance mitigate? American health scholars, politicians, and the public at large answer this question ambivalently. This Article defines three dominant conceptions of health insurance that weave throughout popular and academic discourse and that echoed in the 2010 health reform debates. The first conception is that health insurance should primarily serve to mitigate harms to health. This “Health Promotion” theory relies on using health insurance to pay for medical care that most cost-effectively preserves and improves health. Alternately, health insurance might primarily mitigate risks to wealth from high medical care costs. This “Financial Security” theory demands that health insurance limit financial insecurity from these costs. Finally, the “Brute Luck” theory, highly sensitive to the possibility of ad-verse-incentive effects arising from moral hazard, demands that health insurance protect primarily against unavoidable or “chance” health risks that do not arise from individual behavior. This last theory thus seeks to preserve incentives for insureds to prevent risk themselves, while insurance neutralizes harms from random poor health. Each theory implies distinct principles to guide premium pricing and allocation of premium dollars toward medical care.

The new health reform law, the Patient Protection and Affordable Care Act of 2010 (PPACA), manifests this “conceptual pluralism.” It evokes all three of these notions of the types of risks Americans should share – now more collectively post-reform – through insurance. While the goals of these three theories dovetail at times (e.g., promoting health will in some cases also reduce medical care costs), at other times they are at odds. Conceptual pluralism thus complicates implementation of PPACA as regulators must manage tensions and make tradeoffs among these goals.

The framework offered in this Article is important for two reasons. First, creating a roadmap to understand the different conceptions of insurance, and the values that inform them, brings awareness to the root cause of tensions that will arise as PPACA is implemented. Second, this framework elucidates the different ends that health insurance could serve and thus enables clearer future reflection and debate on what ends it should serve and to what degree.

Number of Pages in PDF File: 82

Keywords: health, health law, health reform, insurance law, health insurance, risk regulation, PPACA

Accepted Paper Series


Download This Paper

Date posted: May 27, 2011 ; Last revised: October 3, 2011

Suggested Citation

Hoffman, Allison K., Three Models of Health Insurance: The Conceptual Pluralism of the Patient Protection and Affordable Care Act (May 11, 2011). University of Pennsylvania Law Review, Vol. 159, 2011; UCLA School of Law Research Paper No. 11-19. Available at SSRN: http://ssrn.com/abstract=1851852

Contact Information

Allison K. Hoffman (Contact Author)
University of California, Los Angeles (UCLA) - School of Law ( email )
385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States
310-206-5230 (Phone)
HOME PAGE: http://www.law.ucla.edu/home/index.asp?page=3426
Feedback to SSRN


Paper statistics
Abstract Views: 2,353
Downloads: 421
Download Rank: 37,721

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.312 seconds