Health Insurance in an Era of Declining Social Capital

Abstract

Putnam’s seminal work on social capital focused on early forms of health insurance as both a result, and accelerator, of the norms of reciprocity and social trust that foster cooperation. Yet, while social capital has been studied as a factor supporting community-based health insurance in developing countries, there has been no analysis of its role in U.S. health insurance. With repeal of the mandate to carry health insurance, this product is once again a purely voluntary purchase, and bears analysis as a cooperation problem. Putnam later documented a sharp decline in social capital in the United States. If social capital undergirds participation in health insurance, we can expect reduced reciprocity to lower willingness to cross-subsidize the sick. Waning social capital could also manifest itself in reduced trust that other healthy people will purchase insurance and lack of trust in the providers and manufacturers who make claims on the insurance pool.