Investor's Business Daily, January 9, 2004

Now that Washington has promised America's seniors subsidized pills, politicians have turned their focus to the uninsured. The presidential campaign season has produced a flurry of plans to solve, forever, the problem of the uninsured. This isn't going to happen.

Short of moving to a totally government-run monopoly health system, the uninsured, like winter in Buffalo, N.Y., will be a much-cursed but intractable fact of life.

The good news is that the bad news about the uninsured, upon examination, isn't that awful.

The first piece of happy, if often ignored, news is that being without health insurance is not equivalent to living without adequate health care. The U.S. health care environment offers a variety of avenues for people to acquire health care, from the old-fashioned method of writing a check, to community health centers and county hospitals.

Americans without health insurance actually spend roughly the same amount of their own money on health care ( $242) as do the fully insured ($211). To put this in perspective, the average U.S. household spends $296 on bakery products and $349 on alcoholic beverages.

Doctors, for example, spend, on average, three hours a week treating patients for free. Hospitals write off another $21 billion. The safety net functions as a catastrophic health plan -- the more care a person needs, the less one pays. The uninsured who do land in a hospital pay a mere 9% of the costs attributed to their treatment.

Better Off Without

In some cases it might improve one's access to care to be uninsured. A recent study found that private practice internists were more likely to accept the uninsured, even if they had to cut fees, than patients covered by Medicaid, the government health insurance program for the poor.

When we examine who the uninsured are and how long they actually remain uncovered, it's clear that for many, going without insurance is a rational choice, not an affliction.

Most don't remain uninsured for long. While some Americans are chronically uninsured, three-quarters of the roughly 44 million uninsured remain so for less than a year.

Expect to hear much this political season of the 8.5 million children under 18 who lack health insurance. That's 11.1%, and that's certainly too many. But it also means that nine in 10 U.S. children can rely on someone other than their parents to pay for most of their health care bills.

What you'll hear less of is the fact that of the 8.5 million children, the Urban Institute estimates that half are eligible for taxpayer-sponsored health insurance, be it Medicaid or some other program. They simply haven't taken advantage of the program or refuse to sign up.

Of the 35 million uninsured adults, one in four are under 24, and half are under 35. Thinking like a young adult rather than a health policy analyst, it's not hard to figure out why many in this age range choose not to purchase health insurance. With few assets to protect, fewer health problems, a sense of invincibility and limited income, health insurance often appears to be a bad deal.

Some Decline

The uninsured aren't universally poor. One in three uninsured live in households with income greater than $50,000, and one in seven live in households that earn more than $75,000 a year.

Nor are all deprived of access to employer-subsidized insurance. One in five workers who are uninsured and offered group health insurance actually decline it.

What then can be done to address the problem? Both of the current 100% solutions are unpalatable.

Lawmakers could pass a government mandate that individuals purchase minimal health insurance, similar to the command to purchase auto insurance. That's the approach Democratic presidential candidate John Edwards is taking toward children's health insurance. He would actually fine parents who didn't take advantage of health insurance programs for their children.

Or lawmakers could increase taxes and create a government monopoly health insurance system. Democratic presidential candidate Dennis Kucinich is taking this approach.

Short of these extremes, policy-makers face incremental steps that include coaxing parents to sign up their eligible children for government provided insurance, facilitating small-business buyer's associations for group insurance, and providing tax incentives for businesses and individuals to purchase health insurance.

What none of these approaches will achieve -- and what no politician can offer short of instituting compulsory, government monopoly health insurance -- is a total solution to the problem of the uninsured. For some, going without health insurance is simply a rational choice.

Sally Pipes is President and CEO of the Pacific Research Institute. She can be reached at spipes@pacificresearch.org.