The Census, ObamaCare and the Uninsured
The Wall Street Journal
The U.S. Census Bureau has released its latest estimates on poverty, income and health-insurance coverage. Strikingly, the official poverty rate is the highest it’s been in 50 years.
As one might expect, the number of Americans without health insurance also roseto 49.9 million, an increase of 919,000 since 2009.
But that large number hides more than it reveals. And diving into it shows that the uninsured rate won’t fall unless the economy starts humming again. Unfortunately, ObamaCare’s billions of dollars in new taxes and regulations won’t allow that to happen.
Let’s take a closer look at the 49.9 million uninsured. The Census reports that 9.5 million of them, about 19%, have household incomes over $75,000. In other words, a fifth of the uninsured make at least 50% more than the median American. They can afford to purchase a plan but have chosen not to.
Another 8.8 million uninsured make between $50,000 and $75,000. Paying for coverage might be more of a stretch for these folks, but they still have incomes higher than the majority of Americans.
For these two subsets of the uninsured population, an insurance plan might not be worth the money, particularly if they’re young and healthy. And with ObamaCare set to drive up the cost of a basic individual insurance plan by 10% to 13%, according to the Congressional Budget Office, the number of voluntarily uninsured is certain to grow.
Another 9.7 million of the uninsured are noncitizens, both legal and illegal immigrants. Illegal immigrants will not be able to participate in ObamaCare’s exchanges, so they’ll continue to seek care in expensive emergency rooms and community hospitals, thereby adding to the cost of care for everyone else. Add these three groups up, and more than half of the people the Census Bureau counts as uninsured could be considered questionably so.
The uninsured truly in need of help are those with household incomes below $25,000. They represent roughly a third of the uninsured, or 16.1 million.
Now, 16 million uninsured is nothing to sneeze at. But they represent only 5% of the American population. Finding coverage for them doesn’t require remaking one-sixth of the U.S. economy, as ObamaCare does. Many of these 16 million people are already eligible for public insurance, chiefly Medicaid and the State Children’s Health Insurance Program. They just haven’t signed up.
The Census figures also show that the number of people with private insurance dropped by 300,000 last year. About 1.5 million people lost their employer-sponsored insurance, most likely because of the economic downturn. But that loss in coverage was partially offset by the fact that over a million people bought coverage for themselves or their families on the private market.
What are we to make of all these numbers? For starters, increasing the employment rate offers the fastest way to reduce the number of uninsured.
The Census pegs the uninsured rate at 16.3%. Not-so-coincidentally, the percentage of the population that is unemployed, has temporarily given up searching for a job, or is working part-time but would like full-time employment is 16.2%.
In America’s employer-dominated insurance system, those two figures are closely linked. Without job growth, the percentage of Americans without insurance will stagnate or increase.
The president and his team have cited the Census figures as proof of the need for ObamaCare. But any coverage gains delivered by the law will undoubtedly be undermined by the law’s $800 billion in tax increases, which will further slow economic growth and prevent employers from hiring, and thus from furnishing the previously unemployed with coverage.
Because of ObamaCare’s mandates and regulations, many employers are also set to drop the coverage they offer and let their employees buy insurance in the exchanges. In June, a study by the consulting firm McKinsey & Co. estimated that about a third of employers will do so. In a report last year published by his American Action Forum, former Congressional Budget Office Director Douglas Holtz-Eakin estimated that 35 million of the 160 million people who currently have employer-based coverage will lose it.
The Census Bureau’s latest report confirms that insurance coverage can be hard to come by. But there’s more to the Census figures than meets the eye. Until the American economy resumes growing, the uninsured rate will stay right where it is.