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April 26, 2007
Your World in Charts: Uninsured Edition
As of late, we've had some commenters hanging around demanding we redefine the word "uninsured," attempting to downplay the problem of lack of coverage, denying all widely accepted measures of the uninsured, and, when that fails, writing the uninsured off as statistical artifacts of momentary lapses in coverage. Soon enough, they suggest, insurance is procured; no harm, no foul. So this struck me as relevant:
When it comes to insurance, the stability of coverage matters. Indeed, what we tend to see is that the effects of having uncertain coverage -- or insufficient coverage -- are very much like the effects of being totally uninsured. The intermittently insured ignore prescriptions, forego specialists, skip treatment, and deny themselves doctor's visits at nearly the rate of the uninsured.
Meanwhile, so far as the total number -- 45.3 million Americans uninsured -- goes, I was struck to see that even the insurance industry uses it. Hell, they even think (or at least say) that "Politicians need to prioritize this issue. Our community has put forth a workable approach to meet the needs of the uninsured - a diverse population that needs targeted solutions which can be implemented in the short term."
The insurance industry isn't prone to overhyping the millions of Americans without insurance, and if they thought themselves capable of calling it 15 million rather than 45 million, they would. They don't. And so, if you're a denier, ask yourself: Are you really comfortable with a world in which the insurance industry is more intellectually honest than you are?
April 26, 2007 in Charts, Insurance | Permalink
Comments
First of all, many thanks to Ezra for this series of posts comparing the US heath care system to other countries' /using hard data/. I have asked on several forums (particularly Kevin Drum's) if such information existed in a form accessible to the layman, and no one knew. Apparently Ezra is finding it and/or putting it together, which is very helpful.
Second, although it is not the kind of statistically-valid data that Ezra is working with, I would urge everyone reading these threads to google for their local Blue Cross (or its successor) and use their web site to calculate how much you would have to pay as for an individual-rate health plan equivalent to what you (and your family if applicable) have now with group coverage. Be sure to add up not only the premium but the annual deductible and other OOP amounts. I think you will be a bit shocked.
Then consider that the current trend in our economy is to kick people out the employment door at age 50 and tell them "there is plenty of consulting work for you out there"...
Cranky
Posted by: Cranky Observer | Apr 26, 2007 1:35:03 PM
God bless you, Ezra, you read all the wonk pubs so we don't have to.
Posted by: Chingona | Apr 26, 2007 1:36:32 PM
Are you really comfortable with a world in which the insurance industry is more intellectually honest than you are?
Yes they are (the bushie goopers and friends).
The DSM needs some new categories for polical nuts. Deniers really are pathological. And metastatic. It takes over their lives, rotting from the head downward.
Posted by: JimPortlandOR | Apr 26, 2007 1:41:03 PM
Yeah. What could the insurance industry possibly gain from promoting widespread belief that not enough people have insurance, and that the government should step in to add financing for this?
Posted by: Chris | Apr 26, 2007 2:27:39 PM
I don't get it. I really don't. What is it about insurance that people do not understand? The insurance companies first duty is to make more money. In fact, that's really their only obligation, everything else flows from that.
Until you remove the profit motive from insurance, you're (and that "you're" is everyone) screwed. Plain and simple. Trying to form a working plan for insurance while allowing profit to remain the motivator only guarantees failure.
There's a difference between insurance and shared risk. What we have now is mostly insurance. What most Americans want and think they are paying for is shared risk. Then again, not all that long ago most Americans thought bush was the savior.
sigh.
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Posted by: SP | Apr 26, 2007 2:48:15 PM
Chris: Certainly true. But they know, and we know, that action towards full access will end up degrading their profits. Better to convince the people that the uninsured are a minor problem at best, and large changes to the business model are unnecessary. That even they realize such a position is indefensible is, as I've often argued, a rather positive sign.
Posted by: Ezra | Apr 26, 2007 2:48:31 PM
"But they know, and we know, that action towards full access will end up degrading their profits."
How is that "known" again?
Posted by: Wisewon | Apr 26, 2007 3:02:12 PM
> What is it about insurance that people do
> not understand? The insurance companies first
> duty is to make more money. In fact, that's
> really their only obligation, everything else
> flows from that.
Actually, many of the early insurance organizations were mutually-owned, and their charters required that they provide the best and most cost-effective service to the communities their customers were drawn from. Many of them took this charge seriously, and community-based health insurance entities (some of which were Blue organizations) in particular did a fairly good job of serving their communities, spreading risk, and paying decent-but-not-outrageous salaries to their employees. State Farm used to credit me with a dividend every once in a while in fact!
Somewhere along the line the mutual form of organization disappeared, the charters of service were dropped, and the 25% growth / 50% gross profits per year crowd was brought in to scoop us as much cash as they could. In fact many of the Blue organizations managed to convert from non-profit mutual organizations to public (or private) corporations while /transferring the mutual surplus to the investment bankers, not their members/! For the life of me I can't figure out how they did this. And of course the community hospital structure was destroyed too.
If you think about it, a mutual organization with a moderate community size (large enough to be diversified but not so large as to be unmanageable) is a very efficient model for an insurance entity. But we tend not to think very carefully about what "insurance" is, so we get blinded by other models.
Cranky
Posted by: Cranky Observer | Apr 26, 2007 3:17:47 PM
"The insurance industry isn't prone to overhyping the millions of Americans without insurance, and if they thought themselves capable of calling it 15 million rather than 45 million, they would."
Who in the realm of politics, on proposing a set of reforms, consciously understates what it is their chosen reforms are ostensibly put forward to address?
It is common practice to do the exact opposite.
Posted by: henry hazlitt | Apr 26, 2007 4:28:54 PM
I too am mystified by Ezra's assumption that it would be in the interests of private health insurers to minimize rather than exaggerate the number of uninsured. They stand to get a lot more business from government initiatives to reduce the number of uninsured by making insurance more affordable or widespread through new subsidies or tax breaks. That gives them an incentive to exaggerate the problem.
As for the charge of "denial," I do not deny that there are 45 million people in a category that could be called "uninsured." But the issue is complex, and the "45 million uninsured" statistic alone is grossly misleading. Is it a relatively static population, or is it constantly turning over? How long does the typical uninsured American go without insurance? To what extent does the lack of insurance prevent someone from obtaining needed health care services? How many of the uninsured are uninsured by choice rather than by economic necessity? How many of them are illegal immigrants who aren't even supposed to be in the country in the first place? And so on. To seriously evaluate the magnitude of the problem, you need to have some idea of the answers to these questions. Proponents of draconian health care reform know that a serious examination of the characteristics of the uninsured population weakens their case for reform, which is precisely why they just endlessly repeat the "45 million" number without any kind of serious examination of what it really means in terms of access to health care.
Posted by: JasonR | Apr 26, 2007 6:55:56 PM
One segment of the population, the age 55-64 group, is particularly vulnerable to job loss and the attendant loss of health insurance coverage. The company I worked for went under when the dot.com bubble burst and I, being 57 had a tough time finding another job. Not being without skills, I started my own one-person business and did well enough to earn a decent living. When my COBRA extension ran out I tried to convert the group policy to an individual policy but was turned down due to pre-existing conditions (nothing major but enough to brand me as a potential drain on insurance company profits). I was eligible for a 'guaranteed issue' policy which was $525 per month for a policy with a $2,000 deductible. That was in early 2002. The announced rate increase beginning in January 2007 brought the monthly premium to $895 which I could no longer afford. I was able to obtain a limited benefit policy from my former union at $292 per month but 'limited' is an understatement as I learned when I was diagnosed with lymphoma and found that the policy pays $500 for each treatment -- the actual cost per treatment is more like $7500.
Under the current system there is no incentive for an insurance company to offer full benefits for anything like an affordable premium to anyone with a greater than average risk of requiring expensive treatment. The only rational basis for health insurance is shared risk and it appears that the best way to spread that risk among the largest number of people is to have universal coverage with no exclusions.
Posted by: dj | Apr 26, 2007 6:57:20 PM
Ezra,
When it comes to insurance, the stability of coverage matters. Indeed, what we tend to see is that the effects of having uncertain coverage -- or insufficient coverage -- are very much like the effects of being totally uninsured.
The chart you posted does not support that claim at all, because it doesn't contain any data on how many times each category experienced the access problem. Obviously, the number of times an uninsured person forgoes needed health care services is likely to increase with the length of time he is without insurance, but the chart shows only whether the access problem occurred, not how many times it occurred. So your conclusion that the effects of uncertain or intermittent coverage are "very much like" the effects of being totally uninsured is not justified.
It's interesting to compare the data on access problems in the U.S. with the data for other countries. The chart on page 4 of this document, taken from the same Commonwealth Fund study as the chart you present, gives data on access problems in five countries: Australia, Canada, New Zealand, the UK and the U.S. All except the U.S. have "universal health care" and yet all have a significant access problem. The problem is worst in the U.S., but not by much compared to New Zealand or Australia (e.g., 40% going without care in the U.S. vs. 34% in New Zealand and 29% in Australia). And the variation in access problems between the countries that do have "universal" care is dramatic--9% in the UK vs. 17% in Canada vs. 34% in New Zealand. Those findings suggest that the primary determinant of access is something other than whether a country has "universal health care."
Posted by: JasonR | Apr 26, 2007 8:12:13 PM
Let's review the numbers, shall we?
Out of 45 million "uninsured" Americans:
17 million (38%) members of households having > $50K annual income
14 million (31%) eligible for Medicaid or SCHIP.
12 million illegal aliens
Whose is redefining "uninsured" here?
Posted by: Stuart Browning | Apr 26, 2007 8:29:03 PM
Stuart,
If those are the numbers, then I would say whoever calls the uninsured population 45 million is redefining the term.
I think most people would assume the terms "uninsured" means that those 45 million don't have access to insurance, which according to your numbers- isn't true for 31% of them, which have access to Medicaid/SCHIP. Including illegal immigants, which would now be roughly 35% of the remaining total also seems distorted-- that's more of a immigration policy issue than a health care issue (i.e. choose your ideal health system, single payer or whatever-- you'll need your SS# or some other identifier that would still likely exclude illegal immigrants, i.e. we have "universal driver's license" but they don't have access to that either.)
Look, I still think universal health care should be a top goal, but it does seem that the fervor of the strongest pro-UHI advocates are pushing numbers that are misleading at best.
Posted by: wisewon | Apr 27, 2007 7:18:03 AM
There's at least as much variation among insureds as there is among uninsureds. Let's discuss the "insureds," which include lots of people like dj (above) and me, and utilization.
I'm self-employed and buy individual Blue health insurance that costs me $265 a month, the cheapest usable (better than dj's) policy and close to unaffordable for me. There are deductibles, and no vision or dental is included. There's also a 20% copay.
I can't walk right now and I have money in the bank, so I'm getting knee surgery. I had $1,000 to pay the surgeon in advance, and I have enough money to pay a couple of thousand in other bills from the hospital, the anesthesiologist, and everybody else that will come due. So I'm utilizing my insurance.
If my other knee goes next year, I probably won't have the money on hand to pay my 20% of the bill, and I won't utilize my insurance. So am I utilizing my insurance or not utilizing my insurance? It depends on whether I can afford it (and how bad my medical problem is).
The number of Americans who are uninsured or poorly insured like dj and me is probably in excess of a hundred million.
Posted by: Joyful Alternative | Apr 27, 2007 6:28:55 PM
Joyful Alternative,
If you make so little money being self-employed that you can barely afford $265/month for health insurance, perhaps you should consider paid employment with health benefits. Presumably, you have many other monthly living expenses--rent or mortgage payments, food, transportation, clothing, utilities, etc.--that total much more than your health insurance premium, and if your financial situation is that precarious you'd be at serious risk of insolvency even if you didn't have that additional cost.
Posted by: JasonR | Apr 27, 2007 7:01:20 PM
Even Medicare, which many liberals want for all of us, is far less than ideal. For example: Part A has a deductible of slightly less than $1,000 for each hospitalization episode. Part B has a $131 deductible and then a 20% co-pay for all covered services with no out-of-pocket maximum. Part D has a $265 deductible (for the standard or default plan) with a 25% co-pay until you reach the donut hole, then an out-of-pocket exposure of $2,800 until the 95% coverage zone is reached. This is why millions of seniors buy Medigap policies that can easily cost $100 per month or more on top of the Part B and Part D premiums they pay for standard Medicare.
The bottom line is that there aren't enough resources in the society or the economy to give everything to everyone while largely insulating them from out-of-pocket exposure. I believe people who have income above 300% of the federal poverty level (FPL) should be prepared to accept much higher deductibles in exchange for a reasonable out-of-pocket maximum in order to provide insulation where it is most needed – from costs associated with a catastrophic illness or event (like severe injuries resulting from an accident). We could provide sliding scale subsidies to cover at least some of the out-of-pocket costs for those at or below 300% of the FPL.
Posted by: BC | Apr 27, 2007 10:56:49 PM
Oh, but universal health care will fix all that. It's a panacea that will provide unlimited health care for all at reasonable cost. There'll be no rationing, no waiting lists, no limits. No drug or surgery or diagnostic test that an American gets today under his private health insurance will ever be denied to him under universal health care because a government bureaucrat has decided it's too expensive or that the benefit to the patient isn't worth it. No one will ever go without health care because they can't afford a co-pay or a deductible or prescription or some other out-of-pocket expense. Medically-related personal bankruptcy will disappear. We know these problems don't exist in other countries and won't exist here under universal health care because the proponents of universal care never mention them at all.
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