A new economic research paper about the financial consequences of illness is the topic of a news article in the New York Times.
The research is interesting, but so is the news article, for the way it makes assumptions about what is or isn't possible. Here's one passage that caught my eye:
To the authors, the lesson of the paper is that standard health insurance isn't enough — policymakers need to think about ways to better protect people against the income risks that accompany illness. In Denmark, for example, similar reductions in income have been found after hospitalizations, but government programs help replace some of the losses, lessening people's financial burden. Such programs, to expand wage insurance, sick leave or disability insurance, would require new resources from the government or employers. [Emphasis added.]
That seems like a big and unwarranted logical leap. In fact I can think of at least three other cases of mandatory insurance that don't involve payment by government or employers. State governments require people to carry automobile insurance if they want to register a motor vehicle. Some private schools require parents to buy insurance to cover tuition payments in case of events such as family relocation or mental health withdrawals. And mortgage lenders require borrowers to purchase homeowners insurance to protect their collateral. It might be politically unpopular to impose what looks like a tax on individuals by requiring them to purchase insurance without providing a subsidy. But it's not accurate, really, to say that such a subsidy, or the resources to provide it, would be required. Maybe if the premiums were affordable enough on a free market basis and the insurance were well designed and well administered, individuals would voluntarily choose to purchase it as a way of limiting their exposure to the financial risks described in the rest of the paper and the Times article.