How to Destroy a Healthcare System (Part IV)

The "Uninsured" Masses

In case you hadn’t heard within the past hour, there are reportedly 46,000,000 Americans without healthcare insurance.

Where did this number come from? This number is derived from the American Community Survey (ACS) conducted annually by the Census Bureau and supplemented with data from the Annual Social and Economic Supplement (ASES). This is a staggering figure endlessly cited by collectivists home and abroad as exhibit one in the case for the need to rush to a government run medical system in America. Those interested in this socialist vision disingenuously create the image that 46,000,000 are wandering aimlessly through our streets ravaged by diseases with no opportunity to receive medical care.

This horrifying picture should prompt at least two comments. First, could this picture possibly be a reasonable rendering of current conditions? The answer would be no. Under EMTALA (Emergency Medical Treatment and Labor Act) it is illegal for a hospital to deny emergency and delivery care. Secondly, who are these 46,000,000 unfortunate victims who, while they do have access to medical care, may not have access to what we all might consider optimal medical care? Can it be possible that we as a nation have ignored the plight of 46,000,000 citizens who lack health insurance, requiring us to radically revise an irreparable healthcare system?

In order to determine who the 46,000,000 are it is necessary to consider definitions used by the Census Bureau. This number repeated ad nauseum by proponents of a single payer, government run system is based on the annual Census Bureau estimates of individuals who have spent at least part of the year without health insurance. The Census defines an individual as “uninsured” if they were not covered by any type of health insurance at any time in that year. The report does not specify the periods of time that individuals might have been uninsured. Included in this number are uncertain numbers of citizens who after being laid off or switching jobs may have had some period without insurance but were back on insurance roles during the year.

In addition, the latest Census Report states, “Health insurance coverage is likely to be under reported in the Current Population Survey (CPS). While under reporting affects most, if not all, surveys, under reporting of health insurance coverage in the latest ASES appears to be a larger problem than in other national surveys that ask about insurance. Some reasons for the disparity may include the fact that income, not health insurance, is the main focus of the ASES questionnaire.”

Somewhat more reliable data is available from the Congressional Budget Office (CBO). In a report issued in 2003, “How Many People Lack Health Insurance and For How Long?”, the CBO, commenting on the most recent year of reliable data (1998), “In recent years, the number of uninsured people in the United States has been pegged at approximately 40 million, or about 16 percent of the non-elderly population. By CBO's analysis, that estimate overstates the number of people who are uninsured all year and more closely approximates the number who are uninsured at a point in time during the year. A more accurate estimate of the number of people who were uninsured for all of 1998--the most recent year for which reliable comparative data are available--is 21 million to 31 million, or 9 percent to 13 percent of non-elderly Americans.” There is no more recent CBO estimate of the number of individuals who may be uninsured for a significant portion of the year. So, if CBO estimates are to be believed, over a given year and based on current numbers, there might currently be closer to 25 to 35 million with sustained lack of medical insurance.

So the numbers of individuals going without health insurance for a full year is far less than some would have us believe; but for some, not all, a short period without health insurance could be difficult. Who are the individuals being denied the opportunity at least 245,000,000 of us now enjoy? The medically uninsured is talked of as a homogeneous group but nothing could be further from the truth. Many individuals move in and out of this group based on employment transition over the course of a year. For those truly interested in developing the best possible healthcare system in this nation, it is critical to further describe the remaining very heterogeneous group of “uninsured”.

The CPS provides reasonable descriptions and estimates of the subgroups which constitute this whole. Based on the CPS, at least 9.7 million foreign born, non-citizens are part of this group. These are illegal aliens, generally in low income categories based on the CPS, who are not on the current insurance roles. The federal government has abetted the influx of illegal aliens for decades. We now are counting 10,000,000 of them as uninsured “Americans.” No other nation on the planet assumes they have an obligation to provide medical care to illegal aliens. There is none.

The CPS also reports that 8.4 million households with an income greater than $50,000 and 9.1 million households with an income greater than $75,000 are without insurance. According to the American Health Insurance Plans (AHIP) survey for 2006-2007, the average national individual and family medical policy premiums were $2613 and $5799 respectively. A significant number of these households are single wage earners but that data is not readily available from the CPS. The Commonwealth Fund reports that one of the fastest growing segments of the uninsured population is the 19-29 demographic. While many in the $50,000 to $74,999 category may be single, let’s assume these are all large families incapable of purchasing medical insurance. We then have 9.1 million households (uncertain number of individuals) that should reasonably be able to afford medical insurance with an income above $75,000.

The catch is that the average policy costs are significantly higher in a number of states. This is because of government meddling. The cost of insurance is directly related to state required mandates placed on health insurance policies offered within the state. The largest number of mandates, is, not surprisingly, found in blue states. In New Jersey, for example, the average individual and family premiums were an astounding $5326 and $10398. Like it or not policy purchasers in New Jersey will be covered for in vitro fertilization, autism, ostomy supplies, breast reconstruction and contraceptives.

The last subgroup to be considered in the pool of 46,000,000 is those who are eligible for government insurance (Medicaid, SCHIP and Medicare) but are not enrolled in the proper program. This number is estimated at 12-14,000,000 individuals.

So lets put this all in context. After subtracting illegal aliens, households which theoretically could afford insurance (>$75,000 income only) and those eligible but not enrolled in government programs, we are left with approximately 13-15 million who fall into the category of without health insurance for some period of time during the year. This number (perhaps 8-10,000,000) includes a large number of individuals with chronic medical problems who are chronically underinsured and are unable to support their healthcare needs. In the end, we are talking generously about approximately 10-15,000,000 individuals whose needs are not capable of being met by the current healthcare system. This constitutes at most 5% of the current population of the United States.

One would never know that the real crux of the healthcare debate is 5% of the population. Those interested in a government run healthcare system lie and distort numbers to create the picture of a nation abandoned and without medical services. Government should play a role in supporting a free market environment which is encouraged to provide care for the 5%. That, however, is not what the President and his minions have in mind. The President is interested in the federal government assuming the power and responsibility for the healthcare sector, which is now responsible for 16% of GDP. Car companies, tobacco companies, even the banking industry takeovers pale in comparison to what government ownership of healthcare would mean.

Healthcare is the Holy Grail of statists in America. Once less than 50% of people pay income tax and the central planners control their healthcare, the citizenry has become a ward of the state.

And who wouldn’t want the government to oversee the healthcare industry. The 45 year old government adventure in health care, Medicare and Medicaid, is bankrupt and unsustainable. It only makes sense that in the name of 5% of the population we would hand over the remaining 50% of healthcare to the lunatics who are burning down the asylum.

Quaere Verum