The American Spectator

Nonetheless, federal legislators and entrepreneurs are making the effort. Self-insured companies can now buy “stop-loss” insurance to cover major payouts without losing their ERISA status. Doctors, lawyers, and other sole practitioners have been allowed to form professional associations that can collectively form ERISA plans. Still out in the cold, however, are small businesses, independent contractors, the self-employed, and the unemployed. More than half of all Americans now get their health insurance through employers, nearly all through ERISA plans. Another 20 percent are covered by Medicaid and Medicare. That leaves another 30 percent with the option of buying impossibly expensive insurance in the regulated commercial market. These people are the nation’s “health-care problem.”

INDIVIDUAL MEDICAL SAVINGS accounts (MSA’s) are the answer. MSA’s allow individuals to set up tax-free savings accounts to cover their medical expenses - the same advantage that large-company employees receive. Individuals are required to buy catastrophic coverage (the real “health insurance”) to cover major expenses. They then pay routine expenses out of their tax-free account. The system, of course, is completely portable. It offers no benefits that ERISA employees don’t already have.

But of course it smacks too much of free enterprise and individual responsibility to please some people. Ridiculously, critics argue MSA’s will “allow healthy young people to opt out of commercial insurance pools” — as if half the country hadn’t opted out through ERISA already. Less than 5 percent of the population now buys its health insurance directly from a commercial carrier.

The political disadvantage of the idea is that it only concerns a minority of the electorate — self-employed professionals, employees of small businesses, and all others who haven’t already climbed aboard ERISA. For the satisfied majority, it offers nothing.

The problem for the country is that the messy business of tying health insurance to employment is now playing serious havoc with economic growth. Coupling health insurance with employment only works for large companies. For smaller growth companies, it adds an impossible burden — or, alternately, makes people reluctant to work for them. The Bush Administration has talked occasionally about a grand vision of making health care and retirement benefits portable, so that people don’t become trapped by their benefits, unwilling to change jobs or work for small companies.

The time to put that proposal on the table is now.