Illness is often unpredictable. When a person without insurance seeks care for a broken bone or the flu, they receive treatment regardless of their ability to pay. That is because we live in a compassionate society — but the treatment is not free. Taxpayers end up shouldering the burden through higher state taxes or increased provider costs.

Economists call this phenomenon “free riding.” Many people are willing to risk going without health insurance knowing that they can get care (and others will pay) if there is a true emergency.

Now that the government has eliminated the federal penalty, more people will be incentivized to drop their insurance, especially healthier people. The best estimates from economic research are that 30 percent of the healthiest current participants in AccessHealthCT, the Connecticut insurance exchange, will leave it. As a result, premiums will likely go up by $1,000 for those who remain.

Connecticut can improve healthcare access while controlling the premiums insurance holders pay. I propose that all residents of the state take responsibility for their healthcare costs by either buying insurance or contributing a fraction of their income to healthcare savings accounts (HSAs).

What about those who refuse to participate? In my proposal, they will instead pay the same level of fee they would have paid for insurance to the state to help cover the costs of care for the uninsured. You can think of this “individual healthcare responsibility fee” as a replacement for the federal mandate, but one that will flow into the state’s coffers rather than that of the U.S. Treasury.

The positive effects of this fee are likely to be widespread. More people will opt to purchase health insurance than they would in the absence of such a fee. Why wouldn’t they, when they can get insurance for the same cost as no insurance? Furthermore, having more people purchasing insurance through AccessHealthCT will lead to economies of scale, more competition, possibly the entry of more insurers, and downward pressure on premiums.

In addition, having more relatively healthy enrollees will lead to lower costs and declining premiums for all participants statewide. According to economic research, this proposal would drive down annual premiums by $300 —possibly as much as $1,000. What’s more, up to 60,000 additional residents could join AccessHealthCT. When Massachusetts introduced an individual mandate smaller than the one I am proposing, enrollment increased by 26 percent and premiums fell by as much as 23 percent.

But if we’re asking individuals to do their part, we have to make it affordable. Premiums are limited to 9.66 percent of income under the federal Affordable Care Act, and I adopt the same definition. State residents who receive a subsidy to purchase insurance through the exchange — those at up to 400 percent of the poverty level, about $100,000 for a family of four —get federal subsidies limiting their costs to that level because paying more would be a hardship.

Meanwhile, those with high incomes can easily find insurance for less than 9.66 percent of their annual income. The challenge comes for those who make too much to qualify for a subsidy but for whom insurance premiums could be an excessive burden. Right now, those people pay a penalty to the IRS but get nothing in return. Under this plan, those residents will contribute the same 9.66 percent of income to an HSA, which they can use to cover direct medical expenses. This creates equity —every income level contributes—and some level of benefit for all participants.

It’s not a perfect solution. In an ideal world, federal and state governments would provide enough subsidies that all residents could afford to purchase insurance. Full insurance is clearly better than a $10,000 healthcare budget in an HSA. But it is still an improvement over our current system, which offers no structure to help these middle-income residents access healthcare services.

Making this proposal work will require careful thought and sustained attention from legislators, healthcare experts, and the staff at AccessHealthCT and other departments of the state government. But doing nothing is not a reasonable option. The federal mandate is going away, which will do great harm to the residents who rely on our exchange if we don’t act.

While challenging, this moment presents a chance for Connecticut to construct a more efficient and more equitable healthcare market — no matter what happens in Washington.

Fiona Scott Morton, a former deputy assistant attorney general for economics at the antitrust division of the Department of Justice, is a professor at the Yale School of Management.

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