Universal Risk Insurance

In recent decades there has been a massive transfer of economic risk from shared institutional arrangements, such as unemployment insurance and basic benefit coverage provided by employers, onto the fragile balance sheets of families. Yet public programs have largely failed to respond.

"Universal Insurance" is a new response to this growing problem. It would provide short-term, stop-loss protection to families whose income (after taxes and public benefits) suddenly decline by a fifth or more due to job loss or catastrophic health expenses. All but the richest families would be eligible, but the program would be most generous for low-income families.

This type of broad-based insurance -- covering a range of risks but focused on substantial income drops or losses -- would provide a flexible new platform of security in a world of rapidly changing risks.

The full text of this essay is available below in PDF format. An expanded version of this paper was originally prepared for The Hamilton Project at The Brookings Institution, and is available at www.hamiltonproject.org.

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Author:

Jacob Hacker