One of America's health care zombies that refuses to die is the notion (created by the Commonwealth Fund) that millions of people who have health insurance are "underinsured", largely due to policies with high co-payments and high deductibles. This results in "medical bankruptcy", another exaggeration. The Commonwealth Fund's conclusions have been picked up by an organization even more committed to "social justice", The Access Project, which advocates for ranchers and farmers in the heartland.
The Access Project has just published the results of a survey of ranching and farming in a number of states - with dire conclusions. The facts are a little less dramatic than advertised.
Nobody argues the case for health reform more vigorously than the bloggers at SPN, but when nine of ten ranchers and farmers have health insurance (as TAP reports), it's hard to conclude that the home on the range is surrounded by the bleached bones of homesteaders driven into medical bankruptcy.
Like the Commonwealth Fund, TAP defines "underinsured" as spending more than ten percent of a household's income on health care in one year. Clearly, this definition is inadequate because it ignores the lifecycle of earning, saving, and spending. If you spent one percent of your income on health care for thirty years, and eleven percent this year, you are "underinsured". If you spend nine percent every year of your life, you are considered adequately insured!
Also, like the Commonwealth Club, TAP dislikes people buying health insurance which we prefer, in the individual market. Instead, TAP prefers the group market, where the tax code drives most of us into the arms of our employers to use health plans that they prefer.
This is because TAP is unwilling to understand that, although the individual pays 100% of his premiums directly in the individual market, he pays only a small fraction of the premiums in the group market. (According to TAP's survey, median spending on premiums and out-of-pocket payments for individually insured households was $11,700 in 2007, versus $5,600 for those covered in the group market.)
Nevertheless, the person insured in the group market pays more indirectly, because his wages are decreased by the amount that his employer pays for his plan. Thus, the individually insured, overall, pays somewhat less for health care. (Other research, although "spun" in opposition to individual policies, calls this "actuarial equivalence".)
Consumer-directed, individually purchased, health policies are not just for us arugula-eating, chardonnay-sipping, San Franciscans. They're for ranchers and farmers in America's heartland, too.
