Having employers join together to purchase health insurance is an idea that continues to have broad appeal. The concept is the foundation of several proposals now before Congress, and several state legislatures have recently passed laws to implement the idea, joining a number of others with laws already on the books. Pooled purchasing arrangements are a major element in a significant proportion of 17 coverage expansion proposals recently prepared for the Covering America project by nationally known health analysts and researchers. And the concept has actually been implemented in a variety of guises across the country in the last several decades. The long-standing interest in pooled purchasing suggests that the idea deserves careful attention.

The purpose of this paper is to explore the functions and structure of pooled purchasing arrangements in the context of a particular approach to expanding health insurance coverage to the uninsured -- namely, an approach formed around an individual mandate and federal tax credits. Before turning to the main topic of pooled purchasing, however, we lay out the principles or underlying values that justify this particular approach to coverage expansion.

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