We’re frequently reminded that 47 million Americans lack health insurance. Their number has fluctuated between 14 percent and 16 percent of the population for the past 15 years, yet left wingers insist that only a government-managed universal health care system can resolve this crisis.
But who are the uninsured? The answer may surprise you — and lead to much different conclusions about what to do.
For starters, the lack of health insurance isn’t permanent for most. Census Bureau statistics indicate that only half of the uninsured remain without insurance for the entire year. In fact, only 16 percent of the uninsured lack health insurance for more than 24 months. The problem isn’t nearly as big as it seems.
Hillary Clinton, in her presidential campaign, claimed to have talked to a single mother with two adopted autistic children, who developed cancer and lacked health insurance. Although it’s hard to imagine such an unfortunate individual without access to any private or public aid, she hardly represents the face of the uninsured. Anecdotes aside, who are the uninsured?
As a group, they tend to be young and healthy. The group most likely to lack insurance are 19- to 24-year-olds. Eighty-eight percent of the uninsured report that they are in good to excellent health. Moreover, the Census Bureau estimates that 10 million are non-citizens and 5 million of those are here illegally.
The elderly are insured through Medicare and the poor by Medicaid (AHCCCS) and the State Children’s Health Insurance Program, but millions of those available for indigent programs fail to enroll.
So even though these Medicaid-eligible persons are deemed uninsured, they have insurance available if something happens and they need it. In fact, Medicaid eligibility can be extended three months retroactively if necessary, thus reducing the incentive to plan for emergent needs.
So aside from those who are only short-term uninsured, those who aren’t citizens and those who have insurance available if they bother to sign up (categories may overlap), who else lacks insurance? Here’s where it gets interesting. More than 17.5 million of the uninsured have household incomes exceeding $50,000, while the incomes of 9 million are more than $75,000.
Health insurance clearly doesn’t compete well with other uses for their money. In a recent California survey of the non-poor uninsured, more than half disagreed with the statement “health insurance ranks very high on my list of priorities for where to spend my money,” while 43 percent agreed that “health insurance is not a very good value.”
They have a point. By purchasing insurance, they are buying into a system that is famously noncompetitive and inefficient. They’ll pay for fellow policy holders who overutilize “free” services. They’ll shell out for mandated services they’ll never use and they won’t get the tax deduction available to employers who purchase insurance.
Many uninsured families feel they’re better off purchasing basic medical care as they need it rather than paying enormous premiums for “use-it-or-lose-it” insurance. To them, the cost-benefit analysis of preparing for an improbable calamity doesn’t add up.
Since 1987, seven states have enacted sweeping health-care reforms. But in spite of regulations, mandates and massive expenditures, the number of the uninsured has remained stubbornly unchanged. These folks don’t need another government program that we can’t afford anyway. They need less expensive, better value insurance.
Luckily, that’s not as hard as it seems. Economists at the University of Minnesota’s Carlson School of Management recently demonstrated, by a meticulous analysis, that 11 million more people would purchase health insurance if it were sold across state lines, as Rep. John Shadegg, R-Ariz., has proposed. Buyers could select low-cost policies from states where the regulations and mandated services were the least onerous.
Of course, state regulators and the interest groups that benefit from mandates are adamantly opposed. But this is just one example of the real change that is possible using the free market to reduce the ranks of the uninsured. Best of all, it wouldn’t cost taxpayers a dime.