Health Reform without Side Effects: Making Markets Work for Individual Health Insurance

As overall health insurance premiums for given coverage have continued to rise and consumer incomes have been near stagnant, consumers are reluctant to spend it on health insurance with a rapidly growing price. Most Americans are still getting good insurance protection for good medical care, but for a sizable fraction things are getting worse; not everything is broken, but some things for some people definitely are.

In Health Reform without Side Effects, Mark V. Pauly offers a detailed look at the individual insurance market in the United States. He explains how it works, suggests approaches to improvement that build on what currently works well, and provides a realistic assessment of how much improvement we can demand and expect. Pauly concludes that, although there are some serious deficiencies in today's individual insurance market, the current criticisms are overly harsh, often based on anecdote and speculation rather than fact, and ignorant of some important advantages in this market that should be preserved. He suggests approaches to change that take into account current strengths of the individual market and can yield much higher net benefits with much greater confidence.

Mark V. Pauly is the Bendheim Professor in the Department of Health Care Systems at the Wharton School of the University of Pennsylvania.

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