I was reading through Paul Krugman’s blog entry from earlier today about Dean Baker being wrong, when I came across the following comment. I don’t know how feasible such a solution might be, but I do think it is very much worth discussing in this argument about the merits of mandates (or lack thereof). Follow me below the fold for more.
I offer a suggestion that I think gets around at least some of this…though there may be other ideas at least as good:
Require employers to make a one time cost of living raise…about a dollar and a half an hour, or $3,000 per year. This money goes to the employee and […] is immediately subject to a payroll tax dedicated to health insurance. Employers already paying for health care can simply redirect the money. Employers not currently paying health care would have to stop being free riders (paying a below subsistence wage) but they would, as they keep telling us, pass the costs on to their customers, or restructure their payrolls and suffer no harm.
The government would assign people without regard to prior condition to blocks of insurees and then auction the contracts for detailed management of these blocks to insurance companies, and would oversee the performance of those contracts in a manner analogous to the way highway contracts are monitored by the state.
I think this should solve both the political problem and the actuarial one…but it might take some serious discussion to settle that.
Like I said, I don’t know how feasible this idea is. But I think it is at least worth debating it on its merits. What do you, dear readers, have to say?