Jeff Kling of Brookings slips on the cloak of a choice architect to design some innovative health care reforms. Kling makes the case for five nudges for the U.S. health care system.
- Establishing automatic enrollment is valuable for any type of health insurance coverage expansion, regardless of whether there is an individual mandate
- Allowing states to augment a national base of health care reforms would enable refinement of various approaches
- Determining eligibility based on data collected through the tax system, either on tax forms or through data matching, would greatly facilitate automatic enrollment
- Implementing collections of individual contributions to premiums through the tax withholding system may facilitate continued enrollment and reduce administrative costs
- Creating a system in which third-parties provide enrollment advice to individuals and are rewarded for their performance may be preferable to legislating how to select a default plan
Figuring out how to simplify the sign-up process for the 47 million Americans without insurance would be one of the biggest challenges facing any new system. Like others who think there is great potential for the government to creatively use tax records, Kling says people might be required to use W4 withholding forms to pick a plan, states might make an initial rough estimate of those eligible for subsidies on the basis of last year’s tax returns, and the IRS might merge data on taxes and immigration status to better determine eligibility. Kling even has an idea for building social norms by creating special accounts for health insurance payments. Private employers providing insurance would deposit money in employees’ accounts, while those without insurance would be required to set aside money each month to pay for certain medical costs or premiums. The goal of these accounts would be to ensure that all Americans, without or without coverage, contribute to the costs of a product that ultimately benefits all of us.