Article   |   Volume 159, Issue 6

Health Insurance, Risk, and Responsibility after the Patient Protection and Affordable Care Act

By
Tom Baker

June 2011










The Affordable Care Act embodies a new social contract of health care solidarity through private ownership, markets, choice, and individual responsibility, with government as the insurer for the elderly and the poor. The new health care social contract reflects a “fair share” approach to health care financing. This approach largely rejects the actuarial fairness vision of what constitutes a fair share while pointing toward a new responsibility to be as healthy as you can. This new responsibility reflects the influence of health economics and health ethics. There are challenges to achieving the solidarity through individual responsibility envisioned in the Act—most significantly ”risk classification by design” and non-compliance with the mandates—but the Act contains regulatory tools that the states, the new Exchanges, and the Department of Health and Human Services can use to address these challenges. This Article provides a high level overview of the distribution of health insurance risk and responsibility after the Affordable Care Act and describes how the Act reforms the key institutions that perform that distribution: Medicare, Medicaid, the large-group health insurance market, and the individual and small-group health insurance market. Health Insurance, Risk, and Responsibility after the Patient Protection and Affordable Care Act - PennLawReview.com