Tuesday, August 28, 2007

47 million uninsured

The Census Bureau reported today that the number of Americans without health insurance reached a record high in 2006 of 47 million, or nearly one out of every six Americans. Blacks are twice as likely as whites to be without insurance, while Hispanics are more than three times as likely. North Carolinians are slightly more likely to be without insurance than residents of other states. Both the number and the percent of people without insurance have grown since 2000.

President Bush's recent observation that "people have access to health care in America...After all, you just go to an emergency room” is as unhelpful as it is callous. His new rules to restrict states from expanding insurance for children through through the State Children's Health Insurance Program (SCHIP) will only make the problem worse.

What about the following three-part proposal based loosely on the Massachusets plan?

First, offer all Americans the opportunity to participate in either Medicaid, SCHIP, or a new publicly-administered, high-deductible, catastrophic health insurance plan. None of these plans would offer Cadillac care, but they would provide basic, no-frills services.

Second, set the premiums for these plans on a sliding scale based on income. That is, set the premiums to be certain fraction of people's incomes, just as we do with the Food Stamp Program (food stamp families are expected to contribute roughly 30 percent of their incomes to their own food purchases; a smaller percentage would be appropriate for medical insurance). People with no income or very low incomes would be enrolled for free--this is essentially how Medicaid works now. People at or near the poverty line would contribute something, and people with moderate or high incomes would pay the full actuarial cost of participation. Some families who currently participate in Medicaid and SCHIP would have to begin paying something for medical insurance (and have the option to switching to the catastrophic plan) while some near-poor and moderate-income families would begin receiving subsidized health insurance. Families with greater means would get access to services at cost. Payments could be made through the tax system, much as FICA taxes and self-employment taxes (Social Security and Medicare) are handled now. These payments would receive the same tax treatment that private payments now receive.

Finally, mandate that everyone either obtain insurance--either through their employer, from a private provider, or from the government--or demonstrate sufficient resources to cover their own health care. This last provision is needed to keep people from free-riding on emergency room care. It is also needed to broaden the insurance pool and to keep people from waiting until they are sick to purchase one of the government plans. Again, the tax system could be used to enforce this mandate. The government would require payments into one of its health plans unless people could document some other type of coverage or a level of assets.

The proposal has the potential to insure every citizen who needs insurance. The societal costs would be enormous; one way or the other public and private funds would have to pay for 47 million people who aren't covered now. However, the drain on the public treasury would be modest. The government would only take responsibility for providing no-frills plans, and it would only cover a small portion of the payments beyond what it is already covering. The majority of Americans who have private insurance could keep those plans under the same conditions as today.

6 comments:

Anonymous said...

Dave,

Do you know how successful -- and costly -- the Mass plan has been? Seems like a sound approach.

As for George Bush, I recall a quote that sums him up: he woke up on third base and thought he'd hit a triple.

thanks,

slappy

Dave Ribar said...

The Mass. plan is still coming up to speed. Although it was passed by the legislature in April 06, it was not 100% in effect until a few months ago. Even now, it appears that the plan is not fully implemented.

A brief implementation report is available at http://masshealthpolicyforum.brandeis.edu/publications/pdfs/31-May07/MassHealthCareReformProgess%20Report.pdf . I haven't had a chance to read it.

One big difference between the Mass. plan and what I proposed is that Mass. provides subsidies to private insurers, which adds to that plans costs.

Dave Ribar said...

A rough calculation of the total up-front societal cost for the plan I proposed would be $125 billion per year. That amount does not account any behavior effects. These would include decreases in emergency room use (or uncompensated care), shifts from uninsured to insured payments, and increases in physician and primary provider care. The $125 billion would be mostly paid by private citizens. Most of the uninsured are above the poverty line and would be capable of paying for some or all of their premiums if reasonable care were offered.

Anonymous said...

I have been blogging on a very similar plan for years and have been called every name in the book for my callous views. Of course my idea does take well-off seniors off of Medicare and places them in the pool for private insurance. Couple this with mandating that everyone must purchase insurance and the market would force private companies to compete and thus lower their prices.

As for 47million people being without medical insurance I have read several other reports from reputable sources that claims as many as 12 million to 18 million of these people are eligible for Medicaid but they won’t bother to apply. Most social workers will tell you this last is true as they have clients who take food stamps (money) but refuse to take the time to sign up for Medicaid preferring the instant access to hospital emergency rooms rather than having to make and keep appointments, and being required to bring their children in to well baby clinics for check ups.

I have followed this site and verified his facts when possible. You might want to check it out also. http://www.healthcarebs.com/ Brenda Bowers

Anonymous said...

The Mass. Plan has a whole lot of problems that aren't generally reported in the national press, but my husbands family lives in Athol and the local press is always bringing up the bad news. The Wisconsin plan is another one we should watch before going with a national health care plan. For more information and references my blog is http://triadblogs.com/BrendaFayBowers click on healthcare in my categories column. BB

Dave Ribar said...

Brenda:

The Wisconsin plan is still being debated; it would need to get through a Republican state assembly (and the governor) before becoming law. In any case, it seems too far-reaching to have much of a chance in Washington.

Likewise, the Mass. plan is complicated by the subsidies that go through private companies. It's still pretty early in that plan's history.

The more modest proposal to make Medicaid available (or an alternative) on a sliding scale basis and to mandate insurance coverage seemed like something that might have a chance. The thing that most people would find attractive is that it wouldn't threaten their current private coverage.

Mandating insurance take-up will be important to overcoming the free-rider (uncompensated emergency room care) problem that you describe and the adverse selection problem of people signing up only when they become sick.