Conclusion
A Novel (My Own) Reform Proposal: Give Rugged Individualists Their Freedom

In an article penned in 2009, before the Affordable Care Act of 2010 had been fully composed, Princeton sociologist Paul Starr¹ had warned the designers of that act to forego the controversial mandate on individuals to be insured. He proposed instead that individuals who failed to purchase health insurance during an initial time window should be barred for five years from the community-rated Obamacare exchanges.

Although I agree with that approach, a penalty period of only five years strikes me as much too short. Therefore, in a New York Times column entitled “Social Solidarity vs. Rugged Individualism,”² I had proposed that by age twenty-six all Americans must choose either to

a) join an insurance arrangement that forces on them community-rated premiums or, alternatively,

b) take a chance on being uninsured or relying on a health insurance market with premiums based on the individual’s health status. If they chose the rugged individualist route, however, they could never later on join the social solidarity pool.³ They would be on their own throughout their life. That scheme would accommodate Libertarians who do not wish to be told by the government what to do about their health insurance.

Figure C.1 Beware the Uninsured Rugged American Individualist.

Source: George Rinhart/Corbis Historical/Getty Images.

By choosing to join the social solidarity pool, young Americans would know that the premiums they pay when young and healthy exceeded their actuarially expected cost of health care, but that they then will be paying premiums far below actuarial costs when they are older and sicker. It would be the health insurance analogue of buying a call option on a stock.

Rugged individualists who had chosen to go uninsured, or to rely on medically underwritten premiums, would know that they could lose all of their assets should they fall seriously ill. If they did fall ill or had a serious injury (see figure C.1) and then could not pay for their care, Medicaid would cover them, because rugged individualists live in a society that does not like to see people dying in the street.

However, should a rugged individualist receive health care under Medicaid, the government would set up an account for him or her to which would be charged all of their medical expenditures, priced at Medicare rates. The government would then have a claim on whatever subsequent assets the rugged individualist might accumulate, up to the debit balance in that individual’s health care account. Libertarians should like this arrangement. To the objection that age twenty-six is too young an age to have to make such a monumental lifetime decision, I would respond that we ask young Americans entering military service to make a far more serious choice, one that may risk their limb and life.