Achieving Universal Health Insurance Coverage in the United States: Addressing Market Failures or Providing a Social Floor?

The United States spends substantially more on health care than most developed countries, yet leaves a greater share of the population uninsured. We argue that incremental insurance expansions focused on addressing market failures will propagate inefficiencies and will fail to facilitate the active policy decisions needed to achieve socially optimal coverage. By instead defining a basic bundle of services that is publicly financed for all, while allowing individuals to purchase additional coverage, policymakers could both expand coverage and maintain incentives for innovation, ensuring universal access to innovative care in an affordable system.