Sunday, November 04, 2007

38% of Uninsured Make $50,000 or More

The chart above (click to enlarge) is from a study by Robert Ohsfeldt (Texas A&M Health Science Center) and John Schneider (Department of Health Management & Policy, University of Iowa) that supports Greg Mankiw's statement in today's NYTimes that:

"The Census Bureau reports that 18 million of the uninsured have annual household income of more than $50,000, which puts them in the top half of the income distribution."

As the chart shows, more than 38% of the uninsured have incomes of $50,000 or higher. To the extent that these 18 million remained uninsured, we would have to assume that many of them remain uninsured voluntarily (or are self-insured and pay for medical services as needed), since their income levels would certainly indicate that they can afford basic health insurance, but choose not to buy it.

13 Comments:

At 11/04/2007 10:48 AM, Anonymous Anonymous said...

Mark Perry said...

To the extent that these 18 million remained uninsured, we would have to assume that they remain uninsured voluntarily, since their income levels would certainly indicate that they can afford basic health insurance, but choose not to buy it.

Unbelievable. You see a statistic and arbitrarily assign a single interpretation for the data without any other interpretation being considered.

What would make sense is to study a representative sample of that group and determine why they don't have health care insurance.

What should make your "blog" is that the U.S. spends nearly twice as much per person as other first world countries but does not produce health care results that are remarkably different from the said countries with "socialized" medicine.

 
At 11/04/2007 12:00 PM, Anonymous holymoly said...

Um, Mark? Have you looked at what the family individual-market health insurance plans are costing these days?

In 2002, according to AHRQ, a family plan purchased on the individual market was about $4,442 (for what is most likely less generous coverage than the group market provides). Arter 5 years of near double-digit inflation, it is likely between $6,000 and $7,000. That's a huge chunk of income (even in a pre-tax sense).

 
At 11/04/2007 12:41 PM, Blogger Mark J. Perry said...

You can get basic health insurance for about $300 per month, about the same as a monthly car payment.

 
At 11/04/2007 1:24 PM, Anonymous Anonymous said...

I just ran a quote for a family of four living in California and got a $232 a month premium for a $1000 deductible PPO plan.

 
At 11/04/2007 1:36 PM, Anonymous holymoly said...

Why don't you give up your employer-sponsored insurance and get it on the individual market then?

 
At 11/04/2007 1:38 PM, Anonymous holymoly said...

anonymous -

With or without prescription drug coverage? What are the coinsurance/co-pay rates? Do you have to pass a health exam first? Exclude pre-existing conditions?

 
At 11/04/2007 2:48 PM, Blogger Walt G. said...

Professor Perry:

I'm curious. I realize that I am somewhat spoiled when it comes to health insurance, but what kind of health insurance coverage can someone get for $300 per month? Does it provide real future financial security for a $50,000-a-year wage earner? A large percentage of bankruptcies are due to health care bills, and many of them have health insurance coverage that did not provide needed benefits.

Most of our UAW people who seriously considered the $140,000 buyouts last year—they lose all benefits except vested pension—were quoted figures much higher than $300-per month for adequate family health-care insurance that included prescription coverage. Would your financial planner recommend this $300-per-month policy? Would you recommend this policy or buy it yourself?

 
At 11/04/2007 5:49 PM, Anonymous holymoly said...

Good question, Walt. I'm waiting for Prof. Perry to give up his government-provided health insurance and purchase some on the private market. Being the private market, I'm sure it's a better deal.

 
At 11/04/2007 10:46 PM, Blogger Mark J. Perry said...

My monthly premium for a basic Blue Cross/Blue Shield health insurance policy is only $318, part of my employee benefits from the University of Michigan, and I have had this coverage for 12 years. Now this is basic coverage and requires no monthly premium from me, so $318 is the total monthly cost. However, I pay the first $500 every year, and the coverage starts for expenses over $500. As you might expect, I am quite frugal in my use of medical services under this type of policy.

If a policy like this was more standard and common, we would have far fewer problems of misuse, and overuse of medical care.

 
At 11/04/2007 11:41 PM, Anonymous holymoly said...

Prof. Perry --

I looked up your benefits on the UM benefits website (http://www.umich.edu/~benefits/plans/medical/monthly.htm). So, based on your self-report of $318, total premium, apparently, I am guessing you selected what is called "comprehensive major medical" (CMM) for yourself (no spouse or dependents). If you had chosen family coverage, the total premium would be $898.86 *PER MONTH*(3 nice car payments).

Moreover, your health insurance coverage leaves you extremely exposed to catastrophic health expenditures. First off, BCBS CMM insurance only covers 80% of costs up to $3,000 (individual; $6,000 family). So, there's some exposure there -- but that's not the scariest part.

Under your insurance (the very cheapest option available), you MUST use BCBS' restricted network. Even in a life-threatening emergency, you are responsible for the difference in whatever the provider charges you and the BCBS preferred amount if you go out of network. In that case, your coverage only allows $70 per day for inpatient acute-care hospitals; $15 per day in specialy hospitals and $25 per visit in outpatient services.

What does this mean? If you end up in a car-wreck (God forbid), if the ambulance takes you to a non-covered provider, you'll be on the hook for tens, if not hundreds of thousands of dollars.

A more traditional kind of health insurance with much less residual risk exposure, such as the BCBS Preferred Provider Option, has a total monthly premium for the BCBS PPO for a family (individual, spouse and children) of $1,224.80 *PER MONTH* (this is a PPO plan, by no means cadillac "fee for service" traditional BCBS insurance). Or the cost of about 4 car payments; or a good solid mortgage payment on a nice house.

Not to mention that the great State of Michigan negotiates a far better deal than you could EVER get on any of these plans in the individual market.

So, when you say that an individual could get decent health insurance for $300 a month, I'm sorry -- but the facts just do not bear that out.

 
At 11/05/2007 7:27 AM, Blogger Walt G. said...

Professor Perry,

I am pretty frugal, too. But, I've had a stroke, two motorcycle accidents, two ear surgeries, and a knee surgery. These procedures were all unplanned and very expensive—one required a two-hundred-mile, air-ambulance transport to a trauma-unit hospital.

Our benefit representatives recommend planning a minimum of $1000-a-month for family coverage, health insurance for workers who give up their company-paid health insurance. I believe that I would buy better health-care insurance and cancel the collision coverage on my vehicles if necessary to pay for it. I’m not so sure that I will have a car accident; however, I KNOW that I will need medical care in the future—it’s inevitable. An investment in quality health-care insurance is one of the best investments anyone can make for themselves.

 
At 11/09/2007 3:14 PM, Anonymous Anonymous said...

Many of these uninsured are very wealthy and choose to self insure.

Another large percentage are young and healthy adults that feel somewhat invinceable and feel that they do not need to insure.

Another group(15-30 million) are illegal aliens that are very poor and realize that they do not need healthcare insurance because all they need to do for a runny nose up to a heart attack is go to the hospital emergency room and they will be provided 1st class medical care for free.

That leaves a very small percentage of people that cannot afford insurance. Again there are many programs that the government sponsors that will give this small percentage of the population health care.

Bottom line is we have the best healthcare in the world. People will buy a house, cars, and big screen t.v.s and take exotic vacations, but for some odd reason they will not take responsibilty for their own healthcare. They expect someone else to pay for their healthcare. When will they learn that nothing is for free, and the free market is the most efficient means to excellent healthcare.

 
At 11/19/2007 10:12 AM, Anonymous holymoly said...

Anonymous @3:14pm

Show me one reputable study that supports your claim that 15-30 million of the US Census Bureau's 47 million uninsured are illegal immigrants.

Waiting for it...

 

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