One-Sentence Health Insurance Reform

"Any health insurance provider must offer to any individual, on the same terms and rates, any policy of insurance that it offers to any other individual or group, and no such policy may exclude coverage of any pre-existing condition."

Period. End of bill. You might call this a "Most Favored Nation" clause, modeled after the WTO trade rules. It sounds fair, and isn't a thousand pages long, so it offers minimum purchase for demagogy.

That provision, standing alone, resolves the problem of individuals being unable to find decent health insurance at reasonable rates, and the related problem of people being bound to a job by their health coverage.

It doesn't resolve other problems that ought to be addressed: cost containment and the fact that people with ordinary incomes can't afford even honestly-priced health insurance.

It also worsens the adverse selection problem: if you're young and healthy, your best bet is to "go naked" and buy insurance only when you actually get sick. The result will be to somewhat increase the price of group health insurance (only partly offset by the virtual aboliton of the "unpaid care account" under which hospitals figure into the rates they charge insurers a portion of the cost of the care they deliver to the uninsured). To a policy analyst, that looks like a tax on group health insurance to subsidize individual health insurance. But to a voter, it doesn't look like a tax at all, and when insurance rates go up Democrats can hold hearings into insurance-executive pay.

Now, you could fix the adverse selection problem with an individual mandate. But that would create a crushing burden on middle-income families whose employers don't pay for part of their insurance. To fix that problem you'd need a subsidy. To pay for a subsidy you'd need a tax increase. To keep the cost of all that down to some reasonable level you'd need cost-containment measures. And now you're back to a thousand-page bill, which the teabaggers can pretend includes "death panels."

If the health insurance companies don't like what this does to their business model, or the employers who now provide health insurance don't like seeing their rates go up, all they have to do is muscle enough of their tame Republican senators to vote cloture on a more comprehensive bill. If not, "Most Favored Nation" wouldn't be a terrible outcome, and would be a popular one.