20 Mar 2006 Uninsured Americans: How Many, and How Do We Help?

Matt at the Center for Faith in Politics blog disagrees with me on health care issues I raised when criticizing a New Republic editorial that makes this claim:

Government isn’t the best way to provide all Americans with health security. It’s the only way.

Matt discusses the large number of Americans (he puts the figure at under 46 million) who do not have health insurance.

As Michael Cannon points out in this 2004 Cato Institute publication, a couple of things need to be understood about the number of uninsured.

First, quite a few of uninsured individuals are eligible for Medicaid. Thus, they do have coverage (although I concede they are failing to earn it by themselves, this is hardly a problem we can expect a “universal system” to solve). In fiscal year 2006, according to Nina Owcharenko of the Heritage Foundation, Medicaid is expected to provide services for 46 million individuals and cost taxpayers $338 billion.

Second, these figures include people who are without health insurance only part of a year. Cannon says:

In addition to those eligible for Medicaid, for instance, [the figure given for the number of uninsured] includes people who lose their health insurance for only a brief period, such as when they graduate from college or change jobs. Over 3 million such people will regain coverage within four months, and another 6 million will regain coverage within 12 months. Various studies suggest that one-fourth (10 million) of this group decline coverage that is offered by their employers, and one-fifth (8 million) live in households making more than $50,000 per year.

Cannon also notes:

Moreover, the persistently uninsured are mostly young (39 percent are under age 25, and another 22 percent are under age 35) or healthy (86 percent report their health to be “good,” “very good,” or “excellent”).

Matt also links to Josh Kidd at Larameekidd, who links to New Yorker author Malcolm Gladwell’s blog.

Gladwell says: “Canadians now spend on health care — and I’m not sure of the exact figure here — something like 60 percent of what Americans spend. If that were increased to, say, 65 percent, many of the rationing and wait-time problems would be alleviated.”

In the early 1990s, my husband David took a look at widely-touted figures from that era showing Canadians spending 55 percent of what Americans spent, per capita, on health care annually. Government-run medicine advocates of that era were arguing that Canada’s ability to deliver health care more inexpensively was evidence of socialized medicine’s superior efficiency. David demonstrated that the figures being used were comparing apples to oranges. U.S. figures included dental care, prescriptions, ambulance services, cosmetic surgeries, private hospital rooms and vision care, while Canadian figures did not. David also noted that the medical expenses of Canadians who had crossed the U.S.-Canadian border to escape that country’s waiting lines would have been counted as part of the U.S.’s per capita figures. When apples were compared to apples, the per capita expenditures of the two nations, at least at that time, were roughly equivalent.

Nonetheless, Gladwell wonders if perhaps Canada’s chronic and serious problem with waiting lines could be alleviated if the Canadians would open their purses a little wider.

“If” is a big word. In government-run systems, health budgets are set by politicians, who have a vested interest in minimizing expenditures (so taxes/deficits can be minimized). So even if health care bureaucracies have perfect knowledge about the best way to allocate funds within government health budgets (another big if), the budget-setting incentives inherent in government-run plans are something other than the health of each individual patient.

Conservative-backed consumer choice systems, however, are designed so the budget-setter is also the consumer. Premium support (paying premiums for low-income citizens) makes the system equitable (in the rich vs. poor sense); the fact that consumers are empowered pushes the system to allocate resources efficiently, according to health care needs. Thus, conservative proposals, properly understood, offer the same opportunities for universal care as do the largely liberal-backed government care proposals, but do so in a manner more likely to get appropriate health care services to the patients who truly need them.

The point, after all, is not to provide health care insurance coverage, the provision of which is the government-run model’s strong suit, but actual medical services.

Given a choice between universal care (offered by the conservative-backed consumer choice model) and universal coverage (what government-run systems actually offer), I submit the public will opt for care.

As the whole of human history shows, governments are great at making promises, but the delivery of goods and services tends to be done best in a competitive marketplace.

Addendum, March 21: Josh Kidd has written to ask our thoughts on the Massachusetts health care debate. I have not followed it closely, but we did address it in this post.

In a March 21 blog post here we add the thoughts of John Graham of the Pacific Research Institute.