|  Candace Talmadge Read Candace's bio and previous columns
May 15,
2009
Income
Alone Doesn’t Make Health Insurance Affordable
Many of
those touting “health care reform” envision it primarily as a government
mandate for individuals to buy health insurance. The argument is that many
of the uninsured will simply refuse to pay for health coverage unless forced
to do so.
Not so
fast, say researchers from the federal Agency for Healthcare Research and
Quality, who have conducted a ground-breaking study on the relationship
between assets and health insurance purchases. Their findings are derived
from 2003 and 2002 data in AHRQ’s medical expenditure panel survey.
In the
May/June issue of Health Affairs, Didem M. Bernard, Jessica S.
Banthin and William E. Encinosa argue that a person’s accumulated wealth
(assets) plays a greater role in determining ability and willingness to buy
health care coverage than annual income alone. By assets, they are talking
about owning things like a home or a business, 401Ks or IRAs, large savings
accounts, investments in stocks and bonds, additional real estate and the
like.
“Our
results suggest that assets are an important determinant of effective
affordability, undermining the notion that many people are uninsured by
choice,” they write. In other words, who can really afford to purchase
health insurance cannot be accurately determined based solely on annual
income.
Examining
the difference in asset ownership between the privately insured
and the uninsured, the authors found that the disparity in purchasing power
is not fully revealed by yearly income comparisons. Median annual
income among the privately insured was 2.9 times that of the
uninsured, but median assets among those with private insurance
was 23.2 times that of the uninsured.
Yes, this
is dull, but it’s critical to the health care reform debate. Suppose
lawmakers write a coverage mandate and base eligibility for possible
subsidies on yearly income alone. The research indicates that they will
seriously overestimate the numbers of people who actually can afford to
comply with the law.
As a
result, millions of Americans will have to choose between paying the rent,
the light bill or groceries and paying their health insurance premium to
follow the mandate. In such cases, food comes first out of necessity. The
likely result: We still won’t achieve universal access to health care, which
is the entire point of reform, isn’t it?
Here are
more boring but essential numbers to ponder. Median net worth of families
with health insurance was $105,819, nearly 35 times greater than $3,057, the
median net worth for families without health insurance. Yet the median
income of families with health insurance was only 2.3 times bigger than the
annual income of those without, some $41,086 compared with $17,690.
Oh, all
right. To heck with the numbers. Just look at this in another way. Health
insurance, especially for individuals and increasingly for businesses of all
size, simply costs too much and delivers too little.
The only
health insurance that those struggling under a potential mandate might
possibly be able to afford are plans with high deductibles (thousands of
dollars each year) and benefits so limited as to be mostly useless. This
kind of reform is nothing but a rip-off that does not prevent millions of
Americans from continuing to go bankrupt thanks to medical costs that their
“affordable” mandated policies simply do not cover.
This is
all nonsense, of course. Any so-called reform that does not offer at least a
true alternative to health care access determined by a for-profit business
model is no reform at all.
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