Recent Rise In Health Coverage Due To Return of Jobs With Benefits

(A version of this Health Alert was published by Forbes.)

The best measurement of people who lack health insurance, the National Health Interview Survey published by the Centers for Disease Control and Prevention (CDC), has released early estimates of health insurance for all fifty states and the District of Columbia in the first quarter of 2016. There are three things to note.

First: 70.2 percent of residents, age 18 to through 64, had “private health insurance” (at the time of the interview) in the first quarter of this year, which is which is the same rate as persisted until 2006. Obamacare has not achieved a breakthrough in coverage. It has just restored us to where we were a decade ago. Further, the contribution of Obamacare’s exchanges to this is almost trivial, covering only four million people.

Obamacare Slightly Increased Short-Term Uninsured

The best measurement of people who lack health insurance, the National Health Interview Survey published by the Centers for Disease Control and Prevention (CDC), has released early estimates of health insurance for all fifty states and the District of Columbia in 2015. There are two things to note.

First: About 70 percent of residents, age 18 to through 64, had “health insurance” in 2015, which is the same rate as persisted until 2006. Obamacare has not achieved a breakthrough in coverage. It has just restored us to where we were less than a decade ago.

What has also happened is a significant change from private coverage to government welfare (primarily Medicaid). The shift has been about five percentage points since 2006, and ten percentage points since 1997. (That is, there was no net change in coverage before the Great Recession, but there was crowding out of private coverage in favor of welfare.)

Categorizing people on welfare programs like Medicaid as having insurance is inaccurate, for the same reason categorizing people receiving cash welfare with employed people into one category of people “earning incomes” would be inaccurate.

Second: The National Health Interview Survey is the best survey because it asks people three questions: Whether they were uninsured at the time of the interview, whether they were uninsured for any time within a year, and whether they were uninsured for more than a year. Unfortunately, it does not differentiate between private coverage and welfare.

Between 2013 and 2015, the number of people who were uninsured for one year or more declined by 12.7 million, from 30.5 million to 17.8 million. However, the number uninsured for less than a year increased slightly from 16.9 million to 17.7 million.

I believe this reflects churning between private coverage, Medicaid, and Obamacare exchanges in the increasingly fragmented post-Obamacare landscape. People fall through the cracks, overwhelmed and confused by an unnecessarily complicated “market.”

Hospitals' Uninsured Patients Rising Again

Remember how Obamacare was supposed to reduce the burden of so-called “uncompensated care” from uninsured patients that was driving hospitals bankrupt? Well, two years into Obamacare it hasn’t worked out that way.

Read the entire entry at NCPA's Health Policy Blog.

Maybe the Government Should Just Not Ask People if They Are Uninsured

Sir John Cowperthwaite was the Financial Secretary of the British Colony of Hong Kong when it began to boom in the 1960s:

Asked what is the key thing poor countries should do, Cowperthwaite once remarked: “They should abolish the Office of National Statistics.” In Hong Kong, he refused to collect all but the most superficial statistics, believing that statistics were dangerous: they would led the state to to fiddle about remedying perceived ills, simultaneously hindering the ability of the market economy to work. This caused consternation in Whitehall: a delegation of civil servants were sent to Hong Kong to find out why employment statistics were not being collected; Cowperthwaite literally sent them home on the next plane back. (Alex Singleton, The Guardian)

What does this have to do with health insurance? The Wall Street Journal’s Jo Craven McGinty reports on the Census Bureau’s rejigging of its measurement of how many Americans are without health insurance.

Read the entire entry at NCPA's Health Policy Blog.

Access to Health Care Unchanged After Obamacare's First Year

The Centers for Disease Control and Prevention (CDC) has released early estimates of health insurance and access to health care for January through September 2014. The National Health Insurance Survey (NHIS) is (in my opinion) the most effective survey of health insurance, because it asks people three different but important questions: Are they uninsured at the time of the survey? Have they been uninsured for at least part of the year? Have they been uninsured for more than a year?

The proportion of long-term uninsured is about the same as it was circa 2000. The proportion of short-term uninsured has shrink a little in Obamacare’s first year. Further, this increase in government dependency has not lead to a change in access to health care.

Read the entire column at NCPA's Health Policy Blog.

Galluping Away with the Uninsured

Gallup has released a teaser for its quarterly update of health-insurance coverage. Although the polling firm released only one datum (that the rate of uninsured fell to 12.3 percent in the first quarter from 12.9 percent in the fourth quarter of 2014) this was enough for President Obama to send forth a victory tweet.

Read the entire article at NCPA's Health Policy Blog.

Reporting Changes In Uninsured Due To Obamacare: Government Agencies Can Be Clearer

One of the themes of this blog is that the number of uninsured Americans is not decreasing as quickly or surely as Obamacare’s supporters would have us believe. Part of the problem estimating this is a confusing series of releases from federal agencies, which has led to inconsistent interpretation by scholars.

Last month, the Centers for Disease Control and Prevention (CDC) released the results of the National Health Insurance Survey (NHIS), which I discussed under the headline “Number of Uninsured Americans Aged 18-64 Down 2 Percentage Points.” What this was referring to was that the percentage of residents in that age group who were uninsured at the time of the interview had dropped from 20.4 percent in 2013 to 18.4 percent in the first quarter of 2014. That’s about 3.8 million people.

However, the proportion who were uninsured for at least part of the last year barely budged from 24.4 percent to 24.3 percent, and the proportion who were uninsured for more than a year dropped by 1.7 percentage points, from 15.7 percent to 14 percent. That’s about 3.2 million people. Obviously, the last group is a subset of the second group. The first group is also a subset of the second group, but it is not clear how to connect the first group and the third group.

It's a big difference, with big policy implications:

Read the entire column at NCPA's Health Policy Blog.

Are There 1.3 Million More Uninsured in 2014?

Kudos to Joe Antos of the American Enterprise Institute for discovering a datum that the government neglected to promote: By one of the government’s own measurements, the number of uninsured Americans increased by 1.3 million during February through April 2014 versus the same three months of 2013.

Read the entire article at NCPA's Health Policy Blog.

Number of Uninsured Americans Aged 18-64 Down Two Percentage Points

The number of uninsured Americans, aged 18-64 has dropped by two percentage points from the first quarter of 2013 to the first quarter of this year, according the Centers for Disease Control (CDC).

That brings the proportion of uninsured down to where it was about ten years ago. In other words, Obamacare has not managed to overcome the results of the recession that began in December 2007. Plus, much of the reduction in uninsured is a result of more people becoming dependent on Medicaid, which is welfare, so should not be viewed as the same type of benefit as individually owned or employer-based health insurance.

Read the entire column at NCPA's Health Policy Blog.

Uninsurance and Child Mortality

Uninsurance and Child Mortality, in which I debunk an article promoted by the mainstream media.

Collective Neurosis in Maine

Maine's experiment in Big Government health care has failed, so advocates call for Gargantuan government health care! My take at State House Call.

Tax Reform, Not Tax Hikes, Will Make Uninsured Patients Pay Their ER Bills

Do states need to make uninsured residents post "bonds" or fine them in order to compensate for ER care that they receive? I say "no", at National Review Online.

Patients' Choice Act: "Exchanges"

Yesterday, I wrote critically about the "auto-enrollment" feature that the federal government would require states to institute if it passed the Patients' Choice Act, a proposal by four outstanding Congressional Republicans. I concluded that the requirement would not be effective.

Another feature of the PCA is the requirement that states establish "exchanges", from which residents could buy health insurance. Once again, I believe that the proposal would be ineffective. Worse, it reflects a fundamental misunderstanding of the risk-pooling function of health insurance. (Unfortunately, it's the same misunderstanding that most people have.)
Congressman Ryan carefully distinguishes an "exchange" from a Massachusetts-style "connector" by the fact that participation in an exchange would be voluntary, whereas a "connector" requires every one to buy health insurance. Well, fair enough, but his Q&A's also show that the "exchanges" would not work as advertised, unfortunately.

First, let's note one of the reasons for the exchange: The Q&A states that "a single patient venturing into the individual market does not have the benefit of spreading risk (and costs) in a broader risk pool." This is almost completely untrue, as demonstrated by Professor Mark Pauly and colleagues (which I discussed in a recent briefing paper, especially pp. 30-31). And it would be even less true if the government reformed the tax code so that we could buy guaranteed renewable, health-status insurance, that lasted our whole lives (as described by Professor Cochrane.)

Second, the PCA promotes states' instituting "voluntary" exchanges, but health plans within the exchange will guarantee issue policies. I.e., people who are already sick will enter the exchanges to buy insurance and those who are healthy will avoid the exchanges. Obviously, this will result in death spirals within the exchanges.

The PCA anticipates that insurers within the exchanges will re-insure each other, as occurs in Switzerland and the Netherlands. However, participation in those countries is mandatory. There's no point re-insuring risk in the exchanges if only sick people buy policies via the exchanges!

The Patients' Choice Act is a serious, good-faith effort to reform health care with minimum government, but it needs a serious make-over.

Patients' Choice Act & "Auto-Enrollment"

On May 20, the insightful policy analysts Joe Antos and Grace-Marie Turner editorialized in favor of the "Patients' Choice Act" in the Wall Street Journal, where they labelled it the "GOP's health-care alternative."

Produced by U.S. Senator Coburn (R-OK), Senator Burr (R-NC), Congressman Ryan (R-WI), and Congressman Nunes (R-CA), the PCA immediately drew some heavy criticism by freedom-loving policy analysts Michael Cannon and Michael Tanner (a.k.a. "the two Mikes") over at the Cato blog.

The PCA would compels states to institute a number of policies. The first one that I found questionable is "auto-enrollment". This means that when you get a job, or a driver's license, or show up at the ER, you are "auto-enrolled" in a health plan. The Congressional authors cite the experience of auto-enrollment in 401(k) plans as an example of how it overcomes eligible beneficiaries' inertia in the face of complex choices.

Well, maybe so, but health insurance is quite different. First, suppose I move to Florida to start a new job and get a new driver's license when I arrive there. I am just about dumb enough to "auto-enroll" in both the default plan that my new employer offers me and the default plan offered by the DMV.

Also, if the hospital ER also offers auto-enrollment (which I suppose would happen if I went to Florida without a job and did not get a driver's license), that procedure misses the whole point of health insurance. It's kind of like the auto-body shop auto-enrollling you in car insurance when you show up after an accident! What kind of a self-destructive car-insurer would sign on to such a program?!?!

The other big difference between health insurance and a 401(k) is that if I stop contributing to my 401(k), the balance just sits at Fidelity (or Vanguard or Merrill Lynch,or wherever) until I roll it over. If I stop paying health-insurance premiums, I obviously auto-disenroll from the plan, defeating the whole purpose. Because nobody seriously proposes that a tax credit alone will fully fund a health policy, but that working people will pay some of their wages in premium, this will result in significant drop out.

Which brings us back where we begun: uninsured people. We either believe in individual choice, which will result in a certain number of uninsured under any scenario, or we believe in mandatory health insurance.

There really is no middle way.

Yes, I Do Have A Nerve: And Hit Them, Too.

My blog essays over at KQED National Public Radio's Healthy Ideas online forum are starting to grate on the others, who advocate more government control over health care. My latest posting takes it all in stride.

Today's "Public Options" for Health Coverage are Already Bankrupt

My latest column for KQED's Healthy Ideas online forum on covering the uninsured.

KQED Online Forum on Health Reform

KQED, Northern California's largest National Public Radio affliate, invited me to join a group of health-policy analysts to answer the question "How do we cover the uninsured?" My response proposes another goal of health-system reform than "covering the uninsured." Please have a look at all the contributions, comment and vote!

Man the Panic Stations! It's "Cover the Uninsured Week"!

The Robert Wood Johnson Foundation (which I think invests in a lot of good work), has once again decided to arm the mob with pitchforks and torches for it's seventh annual "Cover the Uninsured Week."

This year's "scare-sheet" is called At the Brink: Trends in America's Uninsured - A State-By-State Analysis. It focusses on changes in the uninsured from the last period of health reform, HillaryCare, to today. Comparing the average number of uninsured from 1994/1995/1996 to 2006/2007, it concludes that 9 million more Americans are uninsured.

Ignored in the press release is the fact that, with population growth, the proportion of "uninsured" has only increased from 16% of the non-elderly population to 17.5%. In some states, it actually decreased. In Alabama, it dropped from 17.4% to 15.4%. (Whether this has anything to do with Alabama leading the Index of Health Ownership, I cannot directly determine, but I hope there's a connection!)

Even worse, the notion that 46 million uninsured is a meaningful number has been debunked in a number of places, including this book, a briefing paper on California's uninsured, and an analysis of the presidential campaign proposals in the 2008 election.

The media usually digests this stuff without even a burp, so imagine my pleasant surprise when the AP's Ricardo Alonso-Zaldivar's lead sentence in his coverage of the report started like this: "American workers, whose taxes pay for massive government health programs, are getting squeezed like no other group....."!

This alone is impressive: The burden of taxation to fund out-of-control government-run health care programs is nowhere in the RWJF report! Mr. Alonso-Zaldivar had this as background knowledge.

Call me crazy, but this media coverage is change I can believe in!

Crisis of the Overinsured: They Pay Up to Twice as Much for Hospital Services

In Michael E. Porter & Elizabeth Olmstead Teisberg's Redefining Health Care, they note that major health plans succeed by exploiting a competely artificial economy of scale. Because of the tax-code, American workers are compelled to accept health "benefits" from their employers instead of taking their health-care dollars to buy health insurance that serves their families' needs. (I'm using more libertarian language than Porter & Teisberg do.)

This artificial, perverse, government-created, economy of scale leads health plans to structure their products for groups whose members are unrelated except for the fact that they work for the same employer. Successful health plans exploit the lower distribution costs of selling to groups. Unfortunately, this has absolutely no relationship with providing good health care.
For example, if I have an inguinal hernia that requires surgery to repair it, the fact that I work for a small-group employer in California is irrelevent to the surgery I need. If I worked for a jumbo, ERISA-regulated employer like, e.g., Cisco Systems, my medical need would not differ, but I might have access to a completely different network of providers from which to choose a surgeon and hospital.

Furthermore, because a third-party payer has inserted itself in the provider-payment relationship, costs go up. Worse, patients do not know how much their procedures cost because they are merely line-items in monstrous contracts negotiated by providers and health plans. When doctors or hospitals claim that they cannot tell how much a procedure costs, they are telling the truth. This is because neither the plan nor the provider really care about your specific procedure. They care about payment for the entire portfolio of procedures done over a month, quarter, or year. The provider tries to be as creative with the "coding" of his claims as possible, in order to meet or beat a revenue target from each payer. The payer, in turn, looks for variance in the claims submitted that can justify a query and re-pricing the claims downward.

This is changing with the rise of medical tourism within the U.S. Brokers are arranging fixed-price surgeries for self-insured and uninsured parties. At least one health insurer, Wellpoint, has gotten on board. Why would it take such a step, which appears to challenge a key element of its competitive advantage?

With bundled prices agreed (and paid) before the surgery, costs are 30% to 50% less than under contracted-network pricing.

One of the major, unfounded, criticisms of consumer-driven health care is that it cannot drive down costs because only 10% of the population accounts for 70% of health costs. Once patients have met their deductible, they no longer care what procedures cost. (See, e.g. Timothy Stoltzfus Jost, pp. xi, 136.)

Innovations like "domestic medical tourism" debunk that charge utterly.