Health and Poverty
The Wall Street Journal
August 27, 2004; Page A12
Yesterday's batch of data from the Census Bureau is being handled as usual by our gloomy colleagues in the press: more Americans living below the poverty line, more Americans without health insurance. The same stories have been told year after year for so long that it's a wonder we're all not being evicted from emergency rooms to dine in dumpsters. We deal with the income numbers below, but let's first take up the problem of the health-care "uninsured."
The part of this picture that always seems to be ignored is that there are more Americans with various problems in part because there are more Americans. True, the Census Bureau reported yesterday that, by its methodology (more on that in a moment), there was a record total of 45 million Americans without health insurance for at least part of 2003.
But the total number of people with insurance also rose by one million to 243.3 million. Or to put it yet another way, while there are three million more people uninsured in 2003 than in 1996, the percentage of uninsured Americans was exactly the same at 15.6%. That's lower than it was in 1997 and 1998 and within the same range it's been for the past decade.
Ready for some more surprising news? The actual number of uninsured may be a third less than the Census figures claim, while another third of the uninsured appear to be wealthy enough to afford coverage.
How do we figure? Let's start with the fact that the Census Bureau counts as uninsured individuals who are eligible for Medicaid and the State Children's Health Insurance Program (or S-CHIP), but are not enrolled.
This way of counting doesn't make much sense, since these individuals can enroll and have their expenses covered if and when they require health care.
In fact, John Kerry's health proposals single out this group for special attention, with his campaign literature noting that "Today, there are millions of uninsured children who are eligible for health care coverage under Medicaid or SCHIP but are not enrolled." But the hard truth is that making special efforts to enroll these people, as Mr. Kerry proposes, would make no actual difference in the number of people with access to health care.
And how many of such "eligibles" are there, both children and adult? Based on a review of the literature, Devon Herrick of the National Center for Policy Analysis estimates as many as 14 million. That figure seems quite possible, given that the Census Bureau finds more than 15 million "uninsured" individuals in households with less than $25,000 in income, in which many would be eligible for assistance.
And what about the "wealthy" uninsured? The Census data for 2003 show almost 15 million uninsured people in households with incomes above $50,000 (7.6 million of them in households over $75,000).
That's hardly rich, but it's enough to afford coverage in most states if individuals treat health care with the priority it deserves.
Finally, another 18.8 million of the uninsured are between the ages of 18 and 34, and many of them voluntarily (if unwisely) forgo coverage. Their gamble is actually encouraged by "guaranteed issue" laws in many states that reassure the irresponsible that they can avoid buying insurance until they get sick. This defeats the whole point of insurance, which is to pay into a pool when you're healthy so you can be covered when you do get sick.
A young person who thinks he'll live forever is especially inclined to spend his marginal income on something other than health insurance if he knows he can buy it when he really needs it.
We don't point all this out by way of denying that there are some people with genuine difficulties obtaining health insurance. But there are a lot fewer than 45 million of them. The Congressional Budget Office estimated earlier this year that the number of those actually uninsured for the entire year is between 21.1 and 31.1 million.
Perhaps the best proxy for who's really in need are the 14.8 million uninsured who the Census lists in households between $25,000 and $49,000 in annual income.
States like New York could do a lot for this group merely by getting rid of the state insurance regulations that make a basic policy roughly 10 times more expensive than it is in neighboring Connecticut. Better still, Congress could save poor New Yorkers from the tyranny of Albany by putting an end to our Balkanized and anachronistic 50-state insurance market and simply decreeing that there shall be nationwide commerce in health insurance. They could then buy policies issued in saner states or over the Internet. Equalizing the tax treatment for employer-purchased and individually purchased health care, as President Bush proposes to do, is another good step.
Election-year opportunism aside, the Census numbers are actually better news than advertised. An honest review of the numbers shows no crisis of uninsurance in America, and certainly no need to dump more health-care costs and services onto businesses and taxpayers.
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