MORAL FOUNDATIONS OF HEALTH INSURANCE
The US and numerous other countries do not provide universal health insurance coverage to their populations. Conventional approaches to health insurance have typically adopted a neo-classical economic perspective, assuming that individuals make rational decisions to maximize their preferred outcomes, and businesses (including insurance companies) make rational decisions to maximize profits. In this approach, individuals who are risk averse will purchase health insurance to reduce variation in the costs of health care between health and sick periods, particularly to insure against catastrophic medical events. In empirical studies, however, individuals find it difficult to forecast their preferences and do not always make rational choices. They also find it difficult to assess their health risks and to know how much insurance they need. By contrast, medical ethics has focused on equal access to health care, but provided little in the way of philosophical justification for risk management or for addressing loss aversion, regret, anxiety, forecasting, discounting, and redistribution through health insurance per se.
We advance a moral framework for analyzing health insurance: that universal health insurance is essential for human flourishing. The central ethical aims of universal health insurance coverage are to keep people healthy, and to enhance their security by protecting them from both ill health and its economic consequences. Universal health insurance coverage requires redistribution through taxation, and so individuals in societies providing this entitlement must voluntarily embrace sharing these costs. This redistribution is another ethical aim of universal health insurance.
Our empirical projects evaluate health insurance in terms of an individual’s well-being and social welfare. Rather than resting on the individual’s pursuit of maximum satisfaction, with priority given to satisfying individual and aggregate preferences, an alternative welfare economic approach gives moral significance to human capability and human flourishing. Our approach focuses on individuals’ exposure to risk and their ability to adequately manage it, rather than their preferences regarding it. In this approach, universal health insurance is critical to protect individuals against deprivations resulting from illness or injury, and changes in material circumstances. Health insurance helps create opportunities for both good health and protective security; these interrelated freedoms are essential for human capability.
