FOR DECADES health insurance in the United States has been provided to most nonelderly Americans through their own or a family member's employment. This system of employment-based health insurance has evolved largely because of the substantial cost advantages that employers enjoy in supplying health insurance. By pooling large numbers of individuals, employers face significantly lower administrative expenses than do individuals. In addition, employer expenditures on health insurance are tax deductible, but individual expenditures are generally not. Despite these cost advantages, there is widespread dissatisfaction with this system of employment-based health insurance. Many people are excluded because not all employers provide health insurance and not all individuals live in households in which someone is employed. An estimated 36 million Americans were uninsured in 1990. Even among those fortunate enough to have employer-provided health insurance, there is mounting concern that it discourages individuals with preexisting conditions from changing jobs and, for those who do change jobs, it often means finding a new doctor because insurance plans vary from firm to firm.