Uninsured Math Becoming Clearer

Tonight, Obama reduced the number of "uninsured" Americans he is trying to help from 47 to 30 million.   Megan McArdle hypothesizes that he has dropped immigrants and illegal aliens from the number to avoid the political fallout from paying for these groups.

But we can also further drop the number from 30 million to 18 million, because 12 million people are in a category "reform" supporters say could afford insurance today but choose not to buy it.  Rather than being helped by the plan, these 12 million will be expected to either buy insurance they don't want or need or else face severe penalties from the feds:

Under the plan, people who earn between 100% and 300% of the poverty level (or between about $22,000 a year and $66,000 a year for a family of four) would face fees ranging from $750 to $1,500 a year.

For taxpayers with incomes above 300% of poverty, the penalty starts at $950 a year and reaches as high as $3,800 for families. Nearly 12 million people fit in this category, according to the National Institute for Health Care Management.

The idea behind the penalty is that those who can afford insurance but don't buy it are imposing costs on the entire health system. Under the proposal, nearly 12 million people who currently have no insurance could be subject to such fines, according to figures compiled by the National Institute for Health Care Management.

It is hard to argue these 12 million are being helped.  In fact, they are the milch cows helping to pay for the program, giving the lie to Obama's promise not to raise taxes on the middle class.

But of these remaining 18 million, as many as 10-14 million are eligible for Medicare, Medicaid, or SCHIP and are simply waiting until they need medical care before signing up.

Every time anyone counts it, there are about 8-10 million truly hard core poor and uninsured.  So we are going to screw up the medical care for the other 290 million of us to help these guys?   As I said before, this country is generous and if one were to point out a segment in true need, the money would likely be made available.  What concerns most people is not the libertarian fears I have of more spending and government, but the fear that helping a few folks will mean worse care for everyone else.  The analogy I have used many times is that people don't have a problem contributing to public housing for the poor (even if it turns out to suck), but they do have a problem if they are forced to leave their own home and enter the crappy public housing as well, in the name of some misplaced notion of egalitarian "fairness."


  1. Mike:

    I'm sick and tired of the left suggesting that we are the only modern nation without public health care. That we are "wealthy" and can afford it. But if we are so wealthy, why are we TRILLIONS of dollars IN DEBT!?!?

  2. Kevin Dick:

    I ran the numbers myself on what it would cost to cover the 28M uninsured making less than $50K/yr with very basic major medical plus $300/yr (average) HSA. My optimistic estimate was $63B/yr. Double that to be pessimistic. That's doable without breaking the bank.

    So as you say, why are we potentially messing up care for the rest of us on a need that is 2-4% of our annual $3T in government outlays?


  3. Hal (GT):

    The problem (cough cough) probably is that they just aren’t used to handling such small numbers. After all, they just had to ask for raising the debt ceiling over 12 Trillion. 17 million people is like pennies at that point and who doesn’t misplace pennies?

  4. John Moore:

    I'm waiting to hear how the problem of the uninsurables (pre-existing conditions) will be solved by Coyote or anyone else. Some percentage of uninsured's are uninsurable AT ANY PRICE.

    There are a lot of people either in that category, or afraid (with good reason) that they will end up in that category as they age. Most are employed - for now. Having one's entire financial future dependent on employment, no matter how thrifty you are in any other way, is simply not tolerable. It represents not only unfairness (and we have to accept unfairness, contrary to what the left believes) but also economic drag. How many older people (or those with asthma, or those (at least at one time) who ever took a single Prozac) are unable to retire, unable to become entrepreneurs, and unable to work at smaller companies. How many of them know that if they lose their jobs, they will lose their insurance 18 months later (if they jump precisely through the Cobra hoops - been there, done that), because companies with health insurance do not want to hire them.

    There's a lot more to this issue than the misleading numbers (by BOTH sides) on the number of uninsured.

    It is totally irrational for health insurance to be tied to employment, but it is the only way that we have seen that delivers large enough risk pools for those with pre-existing conditions to get insurance. And even that is changing, as insurance companies tell employees that, if they don't drop a particular individual, their corporate insurance policy price will go through the roof.

    Don't believe it? I worked at a Phoenix firm of about 100 employees. One of our folks got breast cancer, which cost about $150,000 to treat (not clear how much it cost the insurance company). The next year, the company had to drop her insurance! Fortunately, it was a claims processing software and service company, so was able to self-insure her. This practice is called "laser-ing."

    With this sort of stuff going on, people who are "satisfied with their current health insurance" still have good reason to fear the loss of it for no fault of their own, and the market offers ZERO alternative.