Friday, August 21, 2009

38.6% of Uninsured Households Make > $50k/Yr. and They Choose To Spend Money on Other Things

Despite incessant repetition of the fact that millions of Americans do not have medical insurance, hardy souls who have actually read the mammoth medical care legislation being rushed through Congress have discovered all sorts of things there that have nothing whatever to do with insuring the uninsured-- and everything to do with taking medical decisions out of the hands of doctors and their patients, and transferring those decisions to Washington bureaucrats.

As for those uninsured Americans who are supposedly the reason for all this sound and fury, there is remarkably little interest in why they are uninsured, despite the incessant repetition of the fact that they are. The endless repetition serves a political purpose but digging into the underlying facts might undermine that purpose. Many find it sufficient to say that the uninsured cannot "afford" medical insurance. But what you can afford depends not only on how much money you have but also on what your priorities are.

Many people who are uninsured have incomes from which medical insurance premiums could readily be paid without any undue strain (see chart above, data here). But they choose to spend their money on other things. Many young people, especially, don't buy medical insurance and elderly people already have Medicare. The poor have Medicaid available, even though many do not bother to sign up for it, until they are already in the hospital-- which they can do then.

Throwing numbers around about how many people are uninsured may create the impression that the uninsured cannot get medical treatment, when in fact they can get medical treatment at any hospital emergency room.

Is this ideal? Of course not. But nothing is going to be ideal, whether the current medical care legislation passes or not. The relevant question is: Are the problems created by the current situation worse than the problems that will be created by the pending legislation? That question never seems to get asked, much less answered.

~Thomas Sowell
Originally posted at Carpe Diem.

8 Comments:

At 8/21/2009 7:06 AM, Anonymous Anonymous said...

"38.6% of Uninsured Households Make > $50k/Yr. and They Choose To Spend Money on Other Things"

Yeah, like debt deleveraging.

 
At 8/21/2009 7:29 AM, Blogger JimJinNJ said...

Anon--you are surely correct AND you validate Sowell's point. (It isn't clear that was your intent.)

You see, deciding to NOT purchase healthcare/insurance is not necessarily while you have the money in your savings account. Often it is the default after one has "leveraged" in order to get that bass boat with the advanced underwater radar and reinforced fiberglass hull.

Decisions are cummulative in life. Because you made a bad one last year doesn't mean others should subsidize you the remainder of your life.

That said, as a self-employed person (no other employees) I pay $13K for a BCBS PPO plan. I've ramped up the deductive every year to try to keep premiums flat.
That represents approximately 9% of my "salary." I suspect that a family of $50K couldn't get much of a policy for $5K.

So to me we still have a problem. that family in my preference should have healthcare access. If this society can subsidize large farming operations, provide various tax credits to industries (in fact bail out the weakest!), we can figure out a way to top up the $50K houseful. I don't know how exactly without awful tertiary consequences but surely there is a way.

 
At 8/21/2009 8:56 AM, Anonymous Anonymous said...

Of course there are ways to correct a system that, while not 100% perfect, is the best the world has to offer. But do not think for one minute that Obamacare is the solution. Whatever he proposes, people should do the OPPOSITE.

BTW, archive American Spectator for more in-depth analysis on this subject. That 46 million uninsured figure has been documented to be false. Taking out the illegal immigrant factor as well as those that do make over $50k a year but would rather have deluxe cable, cell phones, etc., plus deduct all the people who actually could have coverage under already existing programs like SCHIP, then the real figure of uninsured is more like 8 million. That's the ugly face of socialism at work: screw a nation of 300+ million all for the 8 million minority....

 
At 8/21/2009 9:05 AM, Anonymous Paul said...

I'm not sure many people who support ObamaCare understand that health care reform will primarily subsidise a small number of peoples' poor choices, and do little to improve their healthcare.

And it will make most peoples' healthcare worse.

Or maybe they do, which is a little more frigtening.

 
At 8/21/2009 12:36 PM, Anonymous Anonymous said...

In debating "health care" people almost always debate "insurance". They are not the same.
I am 69, have no insurance, and pay for doctor visits and medicine with cash. For all the years I could have been paying insurance premiums, I have been investing the money in (mostly) real estate.

If and when we need serious medical treatment, we can sell one of our properties and then get treatment in a country that has reasonable private medical facilities. (Like Mexico, Panama, etc.)

 
At 8/21/2009 2:20 PM, Anonymous Anonymous said...

To answer Anonymous, in the US you pay more if you don't have insurance since you have no bargining power. I hope you at least have one of the discount cards. If you are in the US of course you do have access to Medicare. The noted is true in general about any kind of insurance, since what you talk about is how the Insurance companies make their money. (The investments with the premiums until they are paid out). IT argues for the old Mutual insurance system that the greedy executives of the insurance companies did away with to fatten their wallets

 
At 8/21/2009 5:39 PM, Blogger 1 said...

"To answer Anonymous, in the US you pay more if you don't have insurance since you have no bargining power"...

Well this is an interesting comment and from my own experiences pretty much on target...

Insurance, networks, and doctors in networks tend to make it a bit cheaper yet bargaining hasn't completely gone out the window...

I've used 'cash' (not check or charge card or something similer) for having a tropically acquired skin condition treated...

It wasn't cheap but it was cheaper than what my particular insurance would pay for it and it was service on the spot comparatively speaking...

 
At 8/21/2009 6:47 PM, Blogger Milton Recht said...

Additionally, there are wealthy people included in the low income numbers who could also afford health insurance.

When Rios-Rull at the Minnesota Fed looked at income distributions in the US, he found that the correlation between income and wealth is only 0.321 and the correlation between earnings and wealth, 0.230, is even lower than that between income and wealth. http://www.minneapolisfed.org/research/pub_display.cfm?id=134

Income numbers in the US overstate poverty because income does not include spending of savings or return of capital investment.

Also, income numbers are not annualized so people entering the workforce appear poorer than they are. For example, a new college graduate with a $40,000 a year job who begins working midyear appears in government statistics as making $20,000 that first year. If he has to wait 30 days to get on the company's health insurance benefit, he is also counted as uninsured by the government because the Census Bureau survey of medically uninsured, which is the source of the 36 million uninsured, asks if ANYTIME during the year you were without health insurance.

When the specific individuals who are identified as uninsured are looked at 6 and 12 months later, most have health insurance. The number of involuntary uninsured in the US is even much smaller than the eight million identified by a previous anonymous comment.

 

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