What uninsured crisis?

Roughly 30 million Americans lack health insurance, according to a new report from the Congressional Budget Office.

But there’s more to that 30-million figure than meets the eye. The majority are more or less uninsured by choice. Getting those folks covered can be done for a lot less than the hundreds of billions of dollars Democrats propose spending to remake our nation’s health care system.

According to the CBO, two-thirds of the 29.8 million people who were uninsured last year were eligible for subsidized coverage but didn’t take advantage, for some reason.

Seventeen percent were eligible for Medicaid, the joint federal-state insurance program for low-income Americans — they just never signed up. Seven percent, or 2.2 million people, were eligible under the Affordable Care Act’s expansion of the program. Ten percent, or 2.9 million, were eligible under the old terms of the program, pre-Obamacare.

It’s hard to make coverage much more affordable than “free,” as is the case with Medicaid. Yet roughly 5 million uninsured have effectively rejected that offer.

Another 19% of the uninsured — 5.5 million people — were eligible for subsidized coverage through Obamacare’s marketplaces. Even with the benefit of a taxpayer handout, they’ve decided that exchange coverage isn’t worth the money.

Finally, just under one-third — some 9.4 million people — were eligible for subsidized employer-sponsored health insurance but turned it down.

That still leaves roughly 10 million people who are uninsured and do not have access to subsidized coverage. What about them?

Well, about 4 million of them — 13% of the total uninsured population — are not in the country legally. They aren’t eligible for federal subsidies under Obamacare. President-elect Joe Biden’s $750 billion health reform plan wouldn’t spare a dollar for them either.

Absent reforms that actually make insurance cheaper, they’re likely to stay uninsured regardless of which party’s in charge.

Another 9% of the uninsured make too much money to qualify for federal exchange subsidies. Those subsidies phase out at 400% of the federal poverty level, or $104,800 for a family of four.

It’s hard to argue that families making 50% more than the median income are in need of taxpayer-funded health coverage.

All told, the CBO estimates that the majority of uninsured Americans could secure coverage for less than 10% of their income. That’s right about the threshold at which Obamacare deems insurance “affordable.” But as the CBO points out, “They may not view the coverage to be worth the cost.”

That’s because their premiums might not buy them much in the way of benefits. Obamacare’s mandates have sent the overall cost of health insurance skyward. As longtime policy wonk Robert Laszewski has noted, “It’s not uncommon to see a family of four paying $15,000 for family health insurance with a $7,000 deductible, meaning they have to pay $22,000 before they get anything.”

Perhaps more affordable insurance options, like short-term health plans, would coax some people out of the ranks of the uninsured. Such plans are not subject to Obamacare’s regulations, so they’re cheaper than what’s available on the exchanges. A 2019 CBO report found that short-term plan premiums can be as much as 60% less than those for the lowest-cost bronze plans on the exchanges.

Unfortunately, 11 states have effectively banned short-term plans. Another 20 restrict their availability.

Thirty million uninsured sounds like a lot. But when two-thirds of those folks can’t be bothered to sign up for coverage even when they’re being paid to do so, it’s safe to assume that this “crisis” is overblown.

Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is False Premise, False Promise: The Disastrous Reality of Medicare for All (Encounter 2020). Follow her on Twitter @sallypipes

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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