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31 August 2009

Update on the Uninsured

Michael D. Tanner, a senior fellow at the Cato Institute, has updated us on the uninsured Americans, who according to the Census Bureau number 45.6 million. I have dealt with this issue of the uninsured in previous posts on 25 November 2007, 23 July 2008, 27 August 2008, and 29 August 2008.

The story now is similar. The uninsured are:
  • 12 million eligible for Medicaid and the State Children's Health Insurance Program, including 64% of uninsured children and 29% of parents with children. If these people go to a hospital for treatment, they are automatically enrolled in the relevant program, so they are not really uninsured!
  • 10 million who are not citizens of the United States, where 5.6 million are illegal immigrants and 4.4 million are legal immigrants.
  • 43% of the uninsured have incomes greater than 250% of the poverty level or greater than $55,125 for a family of four. More than one-third have incomes over $66,000.
  • Nearly three-quarters of the uninsured can afford health insurance coverage.
  • 60% of the uninsured are under age 35 and 86% say they are in good or excellent health.
  • About half are uninsured for less than 6 months, 30% for less than one year, 16% for less than 2 years, and less than 2.5% for 3 years or longer.
Tanner then says that with this information in hand, we should be able to produce a more focused plan to address the issue of the uninsured. The young and healthy who choose not to have health insurance, would be more willing to buy it if their premiums were not jacked up by community rating [plans have to accept the already ill, those with unhealthy lifestyles, and the old] requirements often required by the states, by eliminating the many mandated benefits that many people do not need or want, and by allowing people to buy insurance across state lines [in the spirit of the interstate commerce clause of the Constitution].

The generally short durations in which people do not have health insurance suggest that many lose it when they lose or change jobs. Some lose it because they have started a small business and current tax policies exclude many small business owners from tax deductions for health insurance. The best way to deal with this is to give everyone a large Health Savings Account (HSA) to purchase health insurance, but the Democrats hate this for no reason but that it removes health care decisions from politics and deprives them of political power. A great advantage of the HSAs is that they give health care users a reason to care about the cost and effectiveness of the health care they seek from providers. In the government-run system, no one has such reasons for personal interest so costs balloon.

Democrats claim that the massive health care overhaul is needed to address two issues:
  • The many uninsured.
  • The ever-increasing cost of health insurance.
Their answer is to create a new, government-run system which will force everyone to buy much more expensive health insurance than that bought by most people today. This will hit the young and the healthy the hardest. Then they will force the wealthier to pay for the insurance that the less wealthy are already buying or could buy at present prices. Of course, the unfunded Medicaid and Medicare programs will remain inadequately funded and will require either a huge future rationing of health care or huge additional taxes. This makes no sense at all, but never let it be said that Democrats are ever constrained by rationality. Demagoguery is so much more emotional fun. It is so easy to make people imagine that 47 million Americans are so poor that they cannot afford health insurance and they live for decades in terror of becoming ill without any way to pay for care.

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