Jumping Into a Bigger Pool

This isn't my usual focus, but I've been getting very frustrated with a topic that has nothing funny about it—health insurance.

In the debate about whether we should move toward a government plan or whether that would just make a bad situation worse, there's been some discussion of "portability," or making health insurance more transferable between employers. To me that doesn't go far enough. I'd like to see health insurance coverage separated from employment altogether.

The whole idea behind insurance is to spread the risk and the cost across a large group of people. The problem with keeping health insurance connected to employment is that in many cases, those groups simply aren't large enough to keep the premium costs down. They become even smaller when you take into account the number of people who don't need coverage from their employers because they have it through their spouses' jobs. And, of course, those like me who are self-employed don't have much choice except expensive individual plans.

Requiring employers to provide health insurance doesn't make any sense for smaller companies, because it doesn't do anything to solve the small pool/large premium problem. (Here is how the current plan before Congress would affect one small business.)

One way to separate insurance coverage from employment could be for the federal government to set up large pools or groups of people that would be covered under one plan. These groups could be regional, but with the technology we have available they wouldn't have to be. Then insurance companies could offer various coverage plans to those groups, perhaps through competitive bids. There would need to be a way for people to transfer easily from one group to another, so family members would be part of the same pool.

I may be missing something here; perhaps there are drawbacks to such a plan that I simply haven't thought of. But I'd certainly like to see it become part of the discussion.