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Overblown: The Non Existent Crisis Of The Uninsured

June 25, 2009 By: Phred Category: Uncategorized

In debates on health care, one number seems to pop up repeatedly:  the claim that 45 million Americans are uninsured.  Proponents of government controlled health care argue that it is immoral to allow approximately 15% of our fellow citizens to be left without health care.

But, there is something that they arent telling you:  many (if not most) of those without health care in this country choose to not have health care.

Yes, at least 45 million Americans are not currently insured (according to most studies, but Ill get back to that later), but a closer look at the numbers tells a different story than the one that you have probably been told in the past.

I recently read John C. Goodman’s paper titled “Solving the Problem of the Uninsured,” and although I do not support the same solution that he does, I found his paper to be quite interesting.

Dr. Goodman took a hard look at the numbers and facts about the uninsured in this country and found some surprising information.

He wrote that the lack of health insurance can be compared to an experience like unemployment–many people experience it at one time or another, but it rarely is a long term problem.  For example, “75% of uninsured spells are over within 12 months.  Less than 10% last longer than 2 years.”

Many of the uninsured are actually eligible for government or job related health care, but chose not to that advantage of it: “there are between 10 and 14 million people who are theoretically eligible for Medicaid and SCHIP (for low income families who do not qualify for Medicaid) but do not bother to sign up.  This is almost one in every four uninsured persons in the country.”

“Furthermore, in most places people are able to enroll in Medicaid up to 3 months after they receive medical treatment.  Because these people can enroll at the drop of a hat, even after they have incurred medical expenses, are they not de facto insured even without the necessity of formal enrollment?”

“A lot of other people are also voluntarily uninsured.  For example, about 9 million people (more than one in five of the uninsured) are eligible for employer insurance and decline to enroll even though the employer share of the premium is usually nominal.”

Many of the uninsured in America actually have the money to purchase insurance, but for one reason or another chose not to:

“The largest increase in the number of uninsured in recent years has occurred among higher-income families.”

“Further, over the past decade, the number of uninsured increased by 54% in households earning between $50,000 and $75,000 and by 130% among households earning $75,000 or more.  By contrast, in households earning less than $50,000 the number of uninsured decreased approximately 3%.”

“Some information about middle-class families who are voluntarily uninsured is provided by a California survey of uninsured with incomes of more than 200% of poverty.  Forty percent owned their own homes and more than half owned a personal computer.  Twenty percent worked for an employer that offered health benefits, but half of those declined coverage for which they were eligible.  This group was not opposed to insurance in general, however, because 90% had purchased auto, home, or life insurance in the past.”

Now, lets add all of this up:  we have 10-14 million who are eligible for Medicaid or SCHIP, but do not enroll, and an additional 9 million that are eligible for benefits at work but do not sign up and we have between 19 and 23 million people in these two situations alone who are eligible for health insurance, but decline (or choose not to sign up for) it.

This takes a huge chunk out of the original 45 million number, bringing it down to a range between 22 and 26 million people who are uninsured and do not have the option to become insured.  This is a much smaller number, especially when you remember the above statistics that the vast majority of people who are uninsured are uninsured for less than a year.

But, there are also several reasons to doubt the 45 million number itself.  Dr. Goodman’s study cites a study by the CBO which “estimated the actual number of uninsured may be as low as 21 million.”  He also cites “another report [which] finds that, even using Census Bureau methods, the 45 million number is about 25% too high, or off by 9 million people.”  So, if those studies are correct, we have reduced the number of uninsured to 21-36 million.

And, if (and this is THE BIG IF) those two studies that he cited are correct and the number of uninsured is actually between 21-36 million, then it is safe to say that there is no major “insurance crisis” going on in this country.

Why?  Well, at least 19-23 million Americans are eligible for health insurance or coverage but do not take advantage of it.  Combining these numbers and the above numbers from the two studies (one of which came from the CBO), we are left with a range of anywhere from -2 million to 13 million uninsured.  13 million might seem like a huge number, but it is only around 4% of our population (and remember 13 million was the maximum).  There has got to be a way to take care of this small percentage of Americans that will cost less than President Obama’s $1,000,000,000,000 [$1 trillion] health care initiative.

Americanly Yours,

Phred Barnet

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