Affordable health benefits for workers without employer coverage

With 42 million individuals lacking health insurance in 1996, an increase of 1.1 million uninsured from the previous year, new initiatives to deal with health insurance problems merit a high priority among domestic policy initiatives. This paper examines the opportunities for assisting full-time workers (and their families) who do not receive employer-paid health insurance-a group that now includes 49 million individuals-by using three policy tools that Congress and President Clinton have already agreed to use in recent healthcare legislation: (a) equitable tax assistance; (b) market reforms; and (c) competition among health plans that offer economical benefits. Estimates for a model plan illustrate that such strategies could make decent private health insurance more affordable and more accessible for workers and their families who want to purchase it; family insurance protection, with guaranteed issue of insurance and large-group-rated premiums, could be offered at potential savings of 42% (or more). Premiums for worker's coverage, after tax assistance, would be below $1,200 per year, i.e., less than 60 cents per hour. These market-oriented reforms can be accomplished with a limited government role, and, after start-up costs, ongoing federal expenses would be modest, predictable, and controllable. When combined with the new $24 billion child health initiative to assist low-income families, the proposed plan would provide considerable progress toward universal access to affordable insurance coverage.