No Health Insurance – Not A Matter Of Choice

Jason Shafrin from the Healthcare Economist has put together a great Health Wonk Review – and there are 700 billion reasons to go check it out. One of the posts I came across was by our friend Hank Stern from InsureBlog, and I felt compelled to present my own view points in response to his article.

At the Colorado Health Insurance Insider, we strongly believe that there are some fundamental problems with our health care system, not the least of which is the often-quoted statistic that 47 million Americans are without health insurance (the number did get a little smaller recently, but I am guessing it will rise again as a result of the current economic situation). In our health care system, unless you have boundless wealth, being uninsured is a very real hurdle in the way of access to health care. And while Hank does note that being uninsured is a genuine problem, he comes up with a much smaller number of people who are truly without health insurance through no fault of their own (based on research from DC Examiner columnist Sally Pipes).

Well let’s look at the details. First, there are the young people – usually 20 somethings – who are generally strapped for cash, and don’t see health insurance as a priority. I believe that education about insurance and making health insurance mandatory (with subsidies based on income levels) would go a long way towards getting this crowd insured. For people who have never faced illness or injury, and who don’t see health insurance as a necessity, a legal requirement to have some form of coverage would help prevent them from facing bankruptcy at 27 because of unpaid medical bills. I agree with Hank that there is a very real problem when people think that health insurance is unimportant. The sad part is that by the time some of these folks figure out that health insurance is a necessity, they already have a pre-existing condition or two, and find it difficult to qualify for medically underwritten health insurance policies.

The next group of uninsureds – 30% of the total, according to Pipes’ figures – are those who earn more than $50,000/year. The assumption here is that they should be able to afford health insurance with that sort of income. From an economic standpoint, I agree, and would reiterate my belief that health insurance should be mandatory. But I wonder how many of those people are self-employed or work for an employer who doesn’t provide health insurance, and have pre-existing conditions that make them ineligible for individual health insurance? If you’re having to fork over $1000+/month for a guaranteed issue policy from a state high risk pool, that $50,000 income will be stretched pretty thin.

Moving on, we find 20% of the uninsured population to be illegal immigrants. I’m not going to delve too much into this one, because I think immigration is a topic worthy of an entirely separate blog. I don’t think people should have to die in the street because they are in this country illegally and can’t get medical treatment, but I agree that we need limitations on how much free care can be extended to illegal immigrants. So for the purpose of this post, I’ll go ahead and concede this sector as questionable (9.4 million people).

Lastly, a third of the uninsured population is eligible for programs like Medicaid and SCHIP, but have not enrolled in the programs. Hank calls that a choice, but I’m not so sure. I have a college education, including minors in math and economics, and I’ll admit to a lot of head scratching every spring while I’m doing our taxes. I’ve never had to fill out forms for Medicaid or SCHIP, but knowing what I do about government bureaucracy and paperwork, my guess is that it’s not the easiest process. Keep in mind that we’re talking about the poorest sector of our population, and typically the least-educated. Is it really their fault if they aren’t enrolled in a government program that they might not even know exists, much less how to go about signing up? The real question here is why are so many people falling through the cracks? Why are 14 million people eligible for government funded health care and yet not enrolled in the programs? We need to make the process easier. Hospitals could enroll babies born to low income parents in SCHIP immediately. Medicaid could be automatically extended to anyone who qualifies, based simply on a tax return. The IRS could collaborate with Medicaid and just send out Medicaid ID cards, without having people go through another complicated enrollment process. I just honestly can’t picture 14 million low income people saying to themselves “well, I know I qualify for Medicaid, and my children are eligible for SCHIP, but I’d really rather be uninsured, so I’m just going to pass.” I could be wrong (it wouldn’t be the first time), but my guess is that a lot of those 14 million people don’t know about the options available to them, don’t understand the enrollment process, or just don’t have time to deal with it when they come home from the three jobs they work to make ends meet.

Then there’s the issue of how long a person is without health insurance. Hank notes that only 8 million people are “chronically uninsured” and that the rest of the 47 million are an ever-changing group, with members eventually going on to get health insurance. OK, I suppose it’s good news that all 47 million don’t stay uninsured up until they go on Medicare. But if there are 47 million people without health insurance on any given day, what difference does it make whether some of them will eventually get health insurance? You could be insured every day of your life for the first 50 years, and then go uninsured for a month, and fall down the stairs and break your neck during that month. The fact that you were insured for 50 years prior will do you no good at all when the bills start rolling in for your treatment. Health insurance is only an effective safety net if everyone is continuously insured, with no gaps in coverage. Since injury or illness can strike at any time, and none of us have a crystal ball to predict when or where (if we did, we could save a lot of money on health insurance premiums), we have to count any gap in health insurance coverage as a genuine problem.

By Louise

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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