7 A Health Capability Account of Equitable and Efficient Health Financing and Insurance

Abstract

AbstractThis chapter provides an alternative moral framework for analyzing health financing. In the health capability paradigm, continuous universal health insurance is essential for human flourishing. Its central ethical aims are to ensure individual health, develop health functioning and agency, and enhance security. Universal health insurance requires resource redistribution, regulation and public goods creation. In contrast to mainstream economic theory, behavioral economics and prospect theory, the health capability paradigm's view of health insurance focuses on individuals' exposure to risk and their ability to manage it adequately, rather than their preferences regarding it. Under this paradigm, universal health insurance is morally justified because it ensures human flourishing and protects against vulnerability and insecurity. Unlike existing theories in medical ethics, a distinction is made between the promotion of equal access to health care and equal access to the gains in well‐being that accrue from risk pooling and health insurance. The chapter concludes with empirical evidence on the equity of health financing models and examines the public sector's role in creating equitable and efficient health systems, providing public goods and buffering market failures.