Friday, September 17, 2010

4 Out of 10 Uninsured Americans: a) Live in Households Making More Than $50,000 Per Year, and b) Are Between the Ages of 18 and 34

According to this new Census Bureau report "Income, Poverty, and Health Insurance Coverage in the United States: 2009," there were 50.67 million uninsured Americans in 2009, up from 46.34 million in 2008.

The chart above shows the household income levels of those 50.67 million uninsured Americans. There were 10.6 million uninsured Americans living in households making $75,000 per year or more, and this group represents more than 1 out of every 5 uninsured (20.8% of the total number of uninsured). There were about 9.4 million Americans without health insurance in households making between $50,000 and $75,000, representing 18.5% of the uninsured. For those two groups combined, 39.3% of Americans without health insurance (20 million people) were living in households last year with $50,000 or more of household income in 2009 (see Table 8 in the Census report for these data).

Q: With $50,000 or more in household income, wouldn't many or most of those 20 million Americans be without insurance voluntarily? That is, couldn't many of those households afford health insurance? Alternatively, with those income levels (especially the 10.6 million with household income above $75,000), couldn't many of those households choose to forego health insurance in favor of being "self-insured," at least for routine health procedures? Given the widespread availability of more than a thousand convenient and affordable retail health clinics around the country at Wal-Mart, Target, Meijers, CVS and Walgreen, these households could easily be on the "pay-as-you-go" model of self-insurance for health care, at least for routine medical services.

It's also the case that more than 4 out of 10 uninsured Americans (41.8%) in 2009 were between the ages of 18 and 34 years, and the young people in that age group may also voluntarily choose not to be insured, and be "self-insured," because they are young and healthy and elect not to spend money on health insurance.  

As Thomas Sowell wrote last year:

"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)."

57 Comments:

At 9/17/2010 8:13 AM, Blogger Paulie's Books said...

and those people making under $50k could afford health insurance as well...they would just have to tragically get rid of one of their monthly bills on a luxury item. ie. directv, high speed internet, 3g phone service, paying off the 52" flatscreen, etc.

 
At 9/17/2010 8:25 AM, Blogger juandos said...

Well consider what drives up the cost of buying health care insurance: What Drives Up Health Care Costs? 10 Reasons

Health care costs in the United States have risen from $1,100 per person per year in 1980 to nearly $7,900 today. Medical advances during this time deliver value, but not commensurate with the rising costs that push health insurance rates beyond the reach of too many of us. Claiming one in every six cents Americans spend ($2.3 trillion), out-of-control health care costs threaten our entire economy.

AEI in there American magazine notes: Our healthcare system is in trouble today because we have consistently ignored market-oriented solutions and instead sought out policies based on public finance and top-down regulation...

 
At 9/17/2010 9:10 AM, Blogger bix1951 said...

surely you jest...
RE: transfer of wealth from young to old
Seems like Obamacare taxes the young
HOWEVER
After raising two children, I am aware that our culture really transfers a lot to the young. And that is a good thing. So maybe it is fair for the young to pay a little more for health insurance?

 
At 9/17/2010 9:14 AM, Blogger morganovich said...

This comment has been removed by the author.

 
At 9/17/2010 9:16 AM, Blogger juandos said...

I hope this doesn't show up twice...

Well consider what drives up the cost of buying health care insurance: What Drives Up Health Care Costs? 10 Reasons

Health care costs in the United States have risen from $1,100 per person per year in 1980 to nearly $7,900 today. Medical advances during this time deliver value, but not commensurate with the rising costs that push health insurance rates beyond the reach of too many of us. Claiming one in every six cents Americans spend ($2.3 trillion), out-of-control health care costs threaten our entire economy.

AEI in there American magazine notes: Our healthcare system is in trouble today because we have consistently ignored market-oriented solutions and instead sought out policies based on public finance and top-down
regulation
...

 
At 9/17/2010 9:17 AM, Blogger morganovich said...

i think this is where the left tends to show its real fascist colors.

they demand that everyone be insured and simply cannot accept the idea that someone would make a free and rational choice not to buy healthcare. they force their own decisions and preferences onto everyone "for their own good".

i could afford to buy any kind of health coverage i want. i choose to buy very cheap coverage just for catastrophes because i think that's the best deal.

healthcare is a very personal choice and the market is best served by lots of free choice, not one size fits all.

there is also a very strong argument that increased insurance coverage (and lower deductibles) is the reason healthcare is so expensive. the doctor over treats and over tests to cover himself from a liability standpoint. the patients accede because they are not paying.

if your auto mechanic suggested a few extra "tests" for a few hundred bucks "just to be safe" you'd fire him.

with a doctor, you never even ask the price. they wouldn't know if you asked them.

if you car breaks, you always get a quote first. do you do that at the ER? what incentive do they have to even try and compete on price? i got a $1300 bill for 4 stitches and a tetanus shot because i was stupid that way. i won't do that again. but if i had a no deductible plan, i absolutely would and wouldn't care in the least.

MRI's etc are 1/3 the price at specialist clinics, but most are done at hospitals.

if patients have zero price discrimination, it's a nightmare for prices and that will flow through to insurance costs. the only other option is some form of rationing.

i have switched to a cash pay doctor. he takes no insurance of any kind. i get better service and pay far less that my insurer paid my old doc.

if we all paid cash for healthcare, we'd be able to afford it.

 
At 9/17/2010 9:18 AM, Blogger Sean said...

Many people know that insurance against disaster is not necessary because an emergency room is required to treat you regardless of your ability to pay. As long as that is true, the debate for mandatory health insurance is realy about how to get people to pay for what we've already made them buy.

 
At 9/17/2010 9:43 AM, OpenID ninesandquines said...

I would be interested in seeing what the statistics were for 2004-2006 when the economy was doing well. I would venture to say that, as the economy started sliding downhill people choose the wrong things to get rid of (as Paulie's Books suggests). Because let's face it, nobody can get turned down if they show up in the emergency room if they truly need medical attnetion....they may not be able to pay the bill (whether they can "afford" (and by whose standards is that word based on?) it or not) but if they don't, the worst that happens is that it goes on their credit report.

When the market started sliding in 2008 and people saw more and more foreclosures, bankruptcies, etc. I believe they figured that most people's credit scores were suffering and they weren't going to give up the "things" that made them feel good about life.

On another note, the costs, as morganovich also suggests, are out of control. I can give you real-life examples in our residency class next week about disparity in coverage of prescription medications between two separate providers (BCBS & Priority Health). You would be shocked at the prices of some medications and how the insurance companies come up with what they are and are not going to cover. Those are the costs that we, as taxpayers, are going to have to cover as Obamacare gets closer to implementation...our insurance premiums have already risen because of the insurance company's anticipation of these changes.

The entire healthcare SYSTEM (hospitals, drug companies, doctors, etc.) is out of control. And for the government to not address THAT as the issue but instead force its taxpayers to buy something they actually may not need, is deplorable.

As I said above, I really would be interested in how the judgement of what certain people can "afford" is made. A household that consists of one single person making $50,000 has a MUCH different perception of what they can and cannot afford than a household of six with one working parent making $50,000. Blanket studies like this scare me - they get people that do not delve into the actual facts and details behind the study to believe that it's black and white and to form opinions that may not be well informed.

Looking forward to meeting you next week!

Libby Liebig

 
At 9/17/2010 9:50 AM, Blogger Cabodog said...

With the mandate that hospitals treat all, regardless of ability to pay, we already have socialized medicine in place. The responsible end up paying for the irresponsible, the wealthy end up paying for the unwealthy.

In the coming years (if things don't change), I fully intend to put all my assets in a trust for my kids and "go broke." It just seems like it's about the only method of wealth preservation available these days.

If you can't beat 'em, join 'em.

 
At 9/17/2010 10:40 AM, Blogger NC said...

Health Insurance is affordable in most states outside the Northeast. Vermont is a special failure. In effort to seek sameness, age is not risk adjusted. Therefore, a healthy 25 year old pays the same as a healthy 60 year old. That means premiums are north of $350/month with deductibles over $5,000/yr. Howard Dean and his childlike dreams has made insurance unaffordable in VT. This proves that the left does not understand risk, profit, or basic math.

 
At 9/17/2010 11:41 AM, Blogger morganovich said...

the fact that ER's have to treat you is not the same as socialized medicine.

you will get a bill. they will try hard to collect and will smear your credit and possibly garnish your wages if you don't.

this is fine if you are on of the san francisco street drunks who spend so much time in the ER, but as someone with any assets, it's not that great an opportunity.

medical debt is still debt.

 
At 9/17/2010 11:44 AM, Blogger Ron H. said...

ninesandquines said...

"As I said above, I really would be interested in how the judgement of what certain people can "afford" is made. A household that consists of one single person making $50,000 has a MUCH different perception of what they can and cannot afford than a household of six with one working parent making $50,000. Blanket studies like this scare me - they get people that do not delve into the actual facts and details behind the study to believe that it's black and white and to form opinions that may not be well informed."

You're absolutely right that people should be able to set their own priorities and decide what they can or cannot afford, and whether or not they want to pay for health insurance.

HOWEVER...when I'm about to have money ripped out of MY pocket to pay for their coverage I get VERY interested in why they aren't paying for it themselves.

 
At 9/17/2010 11:50 AM, Blogger Sean said...

"the fact that ER's have to treat you is not the same as socialized medicine"

It has many of the same effects: it reduces the costs for those who have less money, raises the costs for those who can pay, and reduces the quality of care because monetary incentives aren't aligned with results.
So our system is much like socialized medicine in a number of ways, but without planning.

 
At 9/17/2010 11:54 AM, Blogger Hydra said...

That is, couldn't many of those households afford health insurance?

==================================

First of all, not necessarily could they afford it, even though it would seem to be a high priorty.

Second, they may not be insurable, at any price.

Third, this is a lot like unemployment statistics: it doesn't say antything about those who are underinsured, or have insurance that won;t actually pay when the need arises.

 
At 9/17/2010 11:55 AM, Blogger Hydra said...

tragically get rid of one of their monthly bills on a luxury item.

==================================

I don't own any of those items, but if I did the payment on all of them together would not make my insurance payment.

 
At 9/17/2010 12:00 PM, Blogger Hydra said...

cannot accept the idea that someone would make a free and rational choice not to buy healthcare.

==================================

There is no rational way to make that choice.

I had a young friend that sufferd a fall while rock climbing. He suffered brain damage and was left with jsut enough intellect to know how badly he screwed up by not having disability insurance.

Even if you are young and healthy and think you do not need it, you are wrong. This young man basically had his entire face removed and replaced so they could fix the broken bones.

He only fell 20 feet.

 
At 9/17/2010 12:03 PM, Blogger Hydra said...

the debate for mandatory health insurance is realy about how to get people to pay for what we've already made them buy.

=============================

Well said. The other way to say it is how to get people to pay for what we have made available to them. You pay for the availability whether you use it or not, same as with the library, public transit, etc.

 
At 9/17/2010 12:04 PM, Blogger Hydra said...

i could afford to buy any kind of health coverage i want.

=============================

That is only because you are healthy.

Try buying it after you have a chronic illness.

 
At 9/17/2010 12:06 PM, Blogger Hydra said...

for 4 stitches and a tetanus shot

================================

Poor baby. I once put six stitches in my foot by myself, because it wasn't worth the drive to the ER and the wait. for that kind of problem you have a choice.

Rupture your spleeen in a softball game, as my brother did, then your choices are not so many.

 
At 9/17/2010 12:10 PM, Blogger Ron H. said...

"Howard Dean and his childlike dreams has made insurance unaffordable in VT. This proves that the left does not understand risk, profit, or basic math."

I used to consider politicians stupid and incompetent, but not any more. Incentives matter, and for a politician there are three: 1.)get reelected 2.)gain more power 3.)favor those who have paid to get you elected.

Considering just those three, most actions make perfect sense. If you doubt it, just look at the actions of our current President.

 
At 9/17/2010 12:10 PM, Blogger Hydra said...

age is not risk adjusted. Therefore, a healthy 25 year old pays the same as a healthy 60 year old.

=================================

Age is not a risk, it is a certainty.

Less so without health insurance.

In fact they have adjusted the risk by averaging the costs, the fact that there isn;t enough money has nothing to do with age and everything to do with the average rate not being set high enough.

 
At 9/17/2010 12:13 PM, Blogger Hydra said...

I fully intend to put all my assets in a trust for my kids and "go broke." It just seems like it's about the only method of wealth preservation available these days.

===============================
You do not have that problem if you do not have children. What you are talking about is not wealth preservation, but wealth transfer (to your kids).

 
At 9/17/2010 12:18 PM, Blogger marmico said...

Households with incomes of <$25k are 3 times more likely to be uninsured than households with incomes of >$75k.

Isn't that the issue?

Now libertarian policy is screw those lazy, shiftless, uneducated bastards that mow our lawns and clean our toilets (ask Sowell what he pays his maid) so that we can take the yacht, moored in Newport RI or Newport Beach CA, out one more time per month.

The positive in the data is that the uninsurance rate declined for those <18 years and >65 years. What's great for the youth is great for the future of the country. (snark on)Just tie granny to a raft and let her float out to sea to meet her maker. (snark off)

 
At 9/17/2010 12:36 PM, Blogger Ron H. said...

"That is only because you are healthy.

Try buying it after you have a chronic illness.
"

What is your point?

The whole idea of insurance is to protect against financial loss due to adverse future events that aren't predictable.

 
At 9/17/2010 12:48 PM, OpenID ninesandquines said...

Ron, I COMPLETELY agree with you - my point is that the results don't tell us much unless they are pointing out how many people are in these households. If these are households with six family members, they may be having to be FORCED to choose to not have insurance coverage in order to keep a roof over their family's head and food on the table. That was what I was trying to point out - if it's a household with ONE person, making $50,000, and they choose to not have health insurance, that is a completely different story - but the study does not give us that information...

marmico, your comment "Now libertarian policy is screw those lazy, shiftless, uneducated bastards that mow our lawns and clean our toilets (ask Sowell what he pays his maid) so that we can take the yacht, moored in Newport RI or Newport Beach CA, out one more time per month" is not fair. I am neither democrat or republican (pretty much not ANYTHING given the current climate in politics), and we mow our own lawn and clean our own toilets, but I don't think I should have to pay for something for someone that they can pay for themselves...I don't have the proverbial yacht you speak of, but I do work hard for what I do have. It's not my fault they are "lazy shiftless and uneducated"...so why should I have to pick up their slack?

 
At 9/17/2010 1:12 PM, Blogger morganovich said...

sean-

it only reduces the cost for the very poorest. 90%+ of folks will have to wind up paying.

that's more like a welfare program (or a progressive tax with a very low cut off) than socialism, but you are absolutely correct that it drives up the prices for the rest of us.

i'm not arguing it's a good idea.

 
At 9/17/2010 1:15 PM, Blogger Michael said...

Ron is right on target. There are two ends to the spectrum. Shared system or a capitalist system and either will do to control healthcare spending. We just have to make a decision and live with the consequences. Either way there are hundreds of billions of dollars if not more on the table. I know families making much more than $50k per year who still use the ER room as their primary mode of medical care and never pay the bill. Just getting them to own the cost and move out of the ER is a victory. As Ron said they are already consuming the product.

 
At 9/17/2010 1:16 PM, Blogger morganovich said...

hydra-

i could still afford it. my point is that my choice is not a function of affordability. if i had to pay $50k a year, i could still afford it if i chose.

my point is that i find it to be a rational choice NOT to buy it.

being able to afford health insurance and wanting to buy it are 2 different things.

 
At 9/17/2010 1:19 PM, Blogger morganovich said...

hydra-

try breaking your neck in a rugby game, then talk to me about nasty injuries.

note that unlike a car crash, such a thing has ZERO effect on your premiums.

frankly, the whole getting dropped when you get sick issue only matters if you change insurance. if insurance were not job related and nationally available, that problem pretty much goes away.

 
At 9/17/2010 2:36 PM, Blogger Hydra said...

frankly, the whole getting dropped when you get sick issue only matters if you change insurance. if insurance were not job related and nationally available, that problem pretty much goes away.

================================

Not entirely. In some states the insurance company can cancel your insurance retroactively, for almost any reason.

Otherwise I agree, we need to divorce insurance from employment status.

Sorry about your rugby accident, but it just amplifies the argument I was making: there is no rational way to play rugby and then make a rational deciion not to have insurance.

 
At 9/17/2010 2:41 PM, Blogger Hydra said...

i could still afford it. my point is that my choice is not a function of affordability. if i had to pay $50k.......

===============================

You make pretty good money then. But what is true for you is not true for most people.

You cannot afford it if it is not avaialable. I could not buy insurance on the open market at any price, and I am a lot healthier than most people,as far as my day to day activities go.

You cannot afford it if they refuse to offer it to you, and you cannot afford it when the price is twice your income.

Your rational decision makes no sense at all for most people.

 
At 9/17/2010 2:49 PM, Blogger Hydra said...

Try buying it after you have a chronic illness."

What is your point?

=================================

The point is that you cannot buy it if it is not made avaialable.

The sudden onset of a chronic illess is ecxactly the kind of unforseen event you want to have insurance for. The system we had before health care reforem allowed insurors to escape the consequences of insuring such a person.

There is no fiscally responisble way to have mandatory coverage without also requiring mandatory participation,therefore you cannot allow people to self selct out, based one the specious idea that they can rationally decide when they they do not need coverage.


Not only is not having coverage areally bad idea, no matter how little you think you need it, itis ALSO a lousy argument.

Is health care reform going to cost most of us more? Absolutely, but we will also have more coverage.

 
At 9/17/2010 2:56 PM, Blogger Hydra said...

i find it to be a rational choice NOT to buy it.

=================================

I find you to be a blithering idiot and a danger to yourself and a liability to society.

Short of owning your own hospital and fleet of doctors, what rational reason can there be for not having health insurance?

I can think of two:

1) You are so sick you are going to die anyway.

2) You are so wealthy you have no chance that health costs will drive you to bankruptcy.

If you are that wealthy, why piddle over the idea that someone else is mandating that you buy health insurance? That is an argyument you have a hard time selling to the masses, and it sounds really snooty.

 
At 9/17/2010 3:35 PM, Blogger Paul said...

"In some states the insurance company can cancel your insurance retroactively, for almost any reason."

Which is why we should be able to buy insurance across state lines. Democrats have exactly zero interest in the idea for some reason, even though they offered all that blather about "choice" via the public option.

 
At 9/17/2010 4:14 PM, Blogger bobble said...

Paul: "Which is why we should be able to buy insurance across state lines. Democrats have exactly zero interest in the idea for some reason, even though they offered all that blather about "choice" via the public option."

not defending the dumbocrats, but have you considered that the republicans had president and congress for six years and did nothing either?

they're both bought and paid for by the healthcare industry.

 
At 9/17/2010 4:31 PM, Blogger bobble said...

i worked for a healthcare company a while back. they told me that the core problem in health insurance is that the people who tend to have health insurance are those who will be collecting on it. the young and healthy don't buy it, the old and sick do. this causes the price to be very high.

i'm not advocating any particular solution, but that's the problem.

something to ponder is that the obamacare solution, forcing the young and healthy into the insurance pool, is basically a copy of what republican mitt romney implemented in massachusetts.

 
At 9/17/2010 5:14 PM, Blogger Ron H. said...

Michael said...,

"Ron is right on target. There are two ends to the spectrum. Shared system or a capitalist system..."

Thanks for the praise, but you are quoting Sean, not Ron.

 
At 9/17/2010 6:49 PM, Blogger Moataz said...

If you are that wealthy, why piddle over the idea that someone else is mandating that you buy health insurance? That is an argyument you have a hard time selling to the masses, and it sounds really snooty.


the fundamental issue ignored here is the coercion required to provide health insurance by mandating it.

First your violating my rights by redistributing my wealth to pay for the services of those who have health insurance needs.

and second your violating the rights of healthcare providers (doctors, nurses, insurance comp.etc..) to provide for the health insurance needs of others

More fundamentally, should an individual or an insurance company be obliged to pay for your care purely because you need it, regardless of the cost to them? The fact that you have a need does not create an automatic obligation on others to fulfill that need.

Given our self-sacrificial culture however the "masses" expect us to be their brother's keepers and regards their needs as "rights". But their needs are not moral claims on our rights. when you talk of a healthcare as a right, you talk of an obligation on the part of others to provide you that healthcare service thereby violating their rights and enslaving them.

and that is my major quibble. All talks about costs and efficiency are secondary issues

 
At 9/17/2010 8:19 PM, Blogger B D Humbert said...

Like all conversations I have seen about this topic I think we need to get very specific - "Healthcare" is made up - at least in my mind - of some very specific components.

1. Care for long term chronic conditions - these would include hypertension, diabetes, kidney problems. Coverage of these is within our reach and affordable - my three high blood pressure meds cost me less than $200 a year at WalMart - I have seen average cost for diabletes at $1000 per year - and yes dialysis is more expensive by far - but we are already guaranteeing access to dialysis - why not add hypertension and diabetes. Moving these conditions to Walmart type coverage will result in a significant reduction in net cost - my meds cost over 4 times as much at Walgreens for example.

2. At the other end of the continuum is catastrophic coverage. Many of the posts in this thread go something like...

"You will be really glad you have health insurance when you have an accident and break your neck."

Covering this type or relatively rare catastrophe through some form of limited scope high deductible policy would seem to be possible and practical. It would also seem to be easy to justify a relatively flat premium across age ranges - I am in my 60s and not likely to go skydiving and have an accident or scuba diving or engage in other dangerous behaviors - but am more likely to have a heart attack or stroke.

Once we deal with these two parts of health care we are left with a bunch of stuff that can cost lots of money - but may or may not be worth the cost - mammograms and colonoscopies are nice - but are they really necessary, and for whom and when...
[we are 5 times more likely to have a colonscopy than the rest of the world which uses cheaper alternative screening approaches]

My Libertarian bias says you should be free to have these tests and treatments - but that I should not be asked to subsidize them - pay for them out of your pocket.

Of course there are the fringe things that often get "mandated" - things like marriage counseling, vasectomies, or viagra prescriptions have snuck into some health plans for political reasons and should be dropped. Of course that will not be easy...

 
At 9/17/2010 10:08 PM, Blogger Hydra said...

the fundamental issue ignored here is the coercion required to provide health insurance by mandating it.

=================================

I don't like coercion either, but as far as this conversation is concerned, the question is how do we get the maximum health insurance for the minimum cost.

Currently, that means that some people who use the coercion argument to manifest their claim to the right to rationally choose not to have healthcare are going to have to be coerced into buying something they THINK they don't need.

In fact, what is going on is age risk management such that they are really paying now for the right to have affordable health insurance later, when they WILL need it.

If you have an idea that will provide an equal level of coverage with less coerciaon and less money, let's hear it.

But if your argument is that we should eliminate a lot of health insurance (nd the cost that goes with it) because it impinges on our freedom, then I would argue like Dirty Harry that "Dyin' ain't much of a way to be free, boy".

 
At 9/17/2010 10:08 PM, Blogger Hydra said...

This comment has been removed by the author.

 
At 9/17/2010 10:13 PM, Blogger W.E. Heasley said...

“….couldn't many of those households choose to forego health insurance in favor of being "self-insured," at least for routine health procedures?”

The risk management matrix creates an axiom regarding risk transfer. The risk management matrix shows that the efficient use of the transfer of risk (insurance) is for low frequency and high severity risks. Insurance is inefficient , ineffective, or unavailable in all other combinations of frequency and severity.

Beyond ObamaCare being a classic price fixing scheme which is bound to result in qualitative and quantitative reductions in supply, ObamaCare is also a cost driver in that it forces insurance to be used for inefficient frequency/severity combinations.

 
At 9/17/2010 10:25 PM, Blogger Hydra said...

Which is why we should be able to buy insurance across state lines.

=================================

If you could buy insurance accross state lines, insurance companies would flock to the state(s) which offers THEM the most protection,and their customers the least protection.

Everyone else would HAVE to buy across state lines.

I think we should be able to buy across state lines, but that means FEDERAL regulation of the inurance companies so they play on a level field. I fyou can buy across state lines, then insurance becomes interstate commerce.

Besides that, buying across state lines won't prevent companies from canceling your insurance. The only way that gets prevented is mandating coverage and reciprocally mandating purchase.

It is a fair trade of one freedom for another. Coercion is only unfair if you consider ONLY the mandated purchase side of the system.

Maybe there is another way, but I don't see it. Yes, health insurance is going to cost mroe, but we will have more coverage, too. The coverage you have will more likely be worth what you pay for it, instead of a total loss (theft actually), like what happened to me.

 
At 9/17/2010 10:36 PM, Blogger Tom Craver said...

Using "per household" figures neglects some issues.

With $50K, a healthy single person could certainly afford health insurance.

What about a family of 8? Or 2 aging people in poor health? Probably not, given the rates they'd have to pay.

A somewhat better statistic might be "in households earning $X per member" - though that still doesn't cover the issue of relative costs of different family members.

 
At 9/17/2010 10:41 PM, Blogger Hydra said...

"The risk management matrix shows that the efficient use of the transfer of risk (insurance) is for low frequency and high severity risks. Insurance is inefficient , ineffective, or unavailable in all other combinations of frequency and severity."

=================================

Agreed.

What we have here is two kinds of transfer. Young healthy people can buy insurance efficiently because they face low frequency and (often) high severity risks.

Old people face near certain requirements for more frequent, more expensive and more severe risks.

We choose to help old people to afford their health care longer by disallowing the young and healty from opting out. Eventually, old people are going to die of something and it becomes ineeffficient and unproductive to try to help them further.


Sooner or later we face the spectre of setting granny out on the back porch to freeze, or something equivalent: people will still die even when we have the most efficient health insurance possible.

We will have to make trade-offs. just because they are hard and ulimately futile, doesn;t mean the choices don;t have to be made. This is oneof those situations where not making a choice is still making a choice and still has economic and ethical consequences.

It is insufficient to simply argue that it is unethical or unconstitutional to coerce compliance, because that ignores coutervailing ethical problems.

 
At 9/17/2010 10:48 PM, Blogger Hydra said...

"First your violating my rights by redistributing my wealth to pay for the services of those who have health insurance needs."

=================================

Rights come with responsibilities.

It is not a violation of your rights to pay for other peoples health isurance (at this time) when you don't need it and they do, provided that you get the same opportunity and consideration when your time comes.

You are paying for roads that you will never drive on and masstransit you will never ride. But you have the OPPORTUNITY to use them whenever the need arises, and that opportunity has a price.

What you are actually arguing is that you should get somehing for nothing and THEY should not.

 
At 9/18/2010 6:26 AM, Blogger juandos said...

Well consider what drives up the cost of buying health care insurance: What Drives Up Health Care Costs? 10 Reasons

Health care costs in the United States have risen from $1,100 per person per year in 1980 to nearly $7,900 today. Medical advances during this time deliver value, but not commensurate with the rising costs that push health insurance rates beyond the reach of too many of us. Claiming one in every six cents Americans spend ($2.3 trillion), out-of-control health care costs threaten our entire economy.

AEI in there American magazine notes: Our healthcare system is in trouble today because we have consistently ignored market-oriented solutions and instead sought out policies based on public finance and top-down regulation...

 
At 9/18/2010 6:41 AM, Blogger W.E. Heasley said...

Hydra said...

“We choose to help old people to afford their health care longer by disallowing the young and healthy from opting out. Eventually, old people are going to die of something and it becomes inefficient and unproductive to try to help them further.”

If the low frequency and high severity is identified and insurance is decided upon regarding transferring risk, then the insurer needs homogeneous exposure units spread over a wide geographic area .

These exposure units are voluntarily transferring risk.

Further the exposure units will need underwritten to create a like kind exposure creating an actuarial claims estimate then price assigned. Then the entire insurance product needs reserved for future losses (ability to pay future claims).

As Thomas Sowell has pointed out many times, everything labeled “insurance” is not insurance. For instance Social Security is described as social “insurance”. An unfunded ponzi scheme is not “insurance”. Medicaid is described as insurance. Medicaid is an unreserved plan based on the authority/ability of the supposed insurer (government) to tax now and tax in the future hence the “insurance” is not reserved against future claims paying ability. Social Security and Medicaid are not insurance, rather they are merely labeled insurance.

The ObamaCare frame work is not insurance to a large extent, violates insurance theory in other events, and relies upon the non-empirical idea of price fixing. In an economy organized around exchange at point price, price fixing schemes have failed going back as far as the Roman empire. ObamaCare is a price fixing scheme with increased taxing authority to fund non-insurance components such as Medicaid which makes up a vast section of ObamaCare. That is, a vast section of ObamaCare is not reserved for and relies on taxing authority to pay for unreserved claim paying ability and a misplaced price fixing scheme to hold down price and hence claim expense.

The private-public section of ObamaCare is a command and control event requiring insurers and the insuring public to provide/purchase required mandated coverage. The mandated coverage, of which has expanded into high frequency/low severity events, requires private insurers to reserve for those events and hence recent price increases to reserve for the ability to pay for future claims associated with mandated high frequency/low severity events.

ObamaCare requires coverage (coverage mandate) and hence is not a voluntary plan with underwriting basically eliminated. The quality of the homogenous exposure units reduce in quality leading to higher and more severe claim experience and hence price increases to reserve for, or tax increases for, a more adverse claims experience (loss ratios rise).

 
At 9/18/2010 6:41 AM, Blogger W.E. Heasley said...

Hydra said...

“We choose to help old people to afford their health care longer by disallowing the young and healthy from opting out. Eventually, old people are going to die of something and it becomes inefficient and unproductive to try to help them further.”

If the low frequency and high severity is identified and insurance is decided upon regarding transferring risk, then the insurer needs homogeneous exposure units spread over a wide geographic area .

These exposure units are voluntarily transferring risk.

Further the exposure units will need underwritten to create a like kind exposure creating an actuarial claims estimate then price assigned. Then the entire insurance product needs reserved for future losses (ability to pay future claims).

As Thomas Sowell has pointed out many times, everything labeled “insurance” is not insurance. For instance Social Security is described as social “insurance”. An unfunded ponzi scheme is not “insurance”. Medicaid is described as insurance. Medicaid is an unreserved plan based on the authority/ability of the supposed insurer (government) to tax now and tax in the future hence the “insurance” is not reserved against future claims paying ability. Social Security and Medicaid are not insurance, rather they are merely labeled insurance.

The ObamaCare frame work is not insurance to a large extent, violates insurance theory in other events, and relies upon the non-empirical idea of price fixing. In an economy organized around exchange at point price, price fixing schemes have failed going back as far as the Roman empire. ObamaCare is a price fixing scheme with increased taxing authority to fund non-insurance components such as Medicaid which makes up a vast section of ObamaCare. That is, a vast section of ObamaCare is not reserved for and relies on taxing authority to pay for unreserved claim paying ability and a misplaced price fixing scheme to hold down price and hence claim expense.

The private-public section of ObamaCare is a command and control event requiring insurers and the insuring public to provide/purchase required mandated coverage. The mandated coverage, of which has expanded into high frequency/low severity events, requires private insurers to reserve for those events and hence recent price increases to reserve for the ability to pay for future claims associated with mandated high frequency/low severity events.

ObamaCare requires coverage (coverage mandate) and hence is not a voluntary plan with underwriting basically eliminated. The quality of the homogenous exposure units reduce in quality leading to higher and more severe claim experience and hence price increases to reserve for, or tax increases for, a more adverse claims experience (loss ratios rise).

 
At 9/18/2010 1:51 PM, Blogger Hydra said...

"ObamaCare requires coverage (coverage mandate) and hence is not a voluntary plan with underwriting basically eliminated. The quality of the homogenous exposure units reduce in quality leading to higher and more severe claim experience and hence price increases to reserve for, or tax increases for, a more adverse claims experience (loss ratios rise)."

I'm not sure I understood all that psychobabble, but it is,for now only prognostication, since most of the obamacare regulations arenot in place yet.

I don't think anyone thinks that unlimited claims is possible, at some point, for each person, we will come to a point at which we say we have done all we can, and dying is now part of your life.

The argument over health insurance is really only an argument over priorities, and we face the same problem with them no matter what health insurance system we have.

Unless you have an explanation for how some other plan is superior, there is not much point in attacking this one, because it is the best we have, at the moment.

"higher and more severe claim experience and hence price increases " sounds to me exactly like what I said previously: yes, we will have higher costs, but we will have more coverage and we will be more likely to get the coverage we paid for.

Finally, lets not confuse the quality of health insurance coverage with the quality of health care.

 
At 9/18/2010 1:57 PM, Blogger Hydra said...

"The mandated coverage, of which has expanded into high frequency/low severity events, requires private insurers to reserve for those events and hence recent price increases to reserve for the ability to pay for future claims associated with mandated "

==================================

Again, this just says (verbosely) that we will get more coverage and we will pay more for it. What else is new?

This is an improvement over paying for coverage and then not getting it, which is what we had before, in my opinion.

I think we can do a lot better, but this is what we got following the input of many, many stakeholders, so we have no one to blame but ourselves.

This system may be terrible, but the one before was worse. Give me some positive suggestions for improving the system that don't consist of "junk it".

 
At 9/18/2010 2:17 PM, Blogger Hydra said...

" Our healthcare system is in trouble today because we have consistently ignored market-oriented solutions and instead sought out policies based on public finance and top-down regulation..."

I agree. I support market based solutions, and I oppose coercion.

Except:

There are some things market based solutions do not do well.

Specifically:

Minimize Total Cost where
Total Cost = Production Cost + External Cost + Government Cost and benefits count ans negative cost.

I'm not interested in a plan that reduces health insurance costs (and coverage) if it increases my costs in the other two areas.

 
At 9/18/2010 2:29 PM, Blogger Hydra said...

"First your violating my rights by redistributing my wealth to pay for the services of those who have health insurance needs."

=================================

This makes it sound like I am violating all of your rights by coercing you to pay.

In fact, you pay for some things and you get other rights in return. We are "coerced" into buying catalyitc converters and mufflers, and in exchange we get new rights which are the right to expect a (relatively) more clean and quieter environment to live in.

It is a mistake to claim that ALL of your rights are violated when you are only talking about one and ignoring the others.

 
At 9/18/2010 5:30 PM, Blogger morganovich said...

"There are some things market based solutions do not do well.

Specifically:

Minimize Total Cost where
Total Cost = Production Cost + External Cost + Government Cost and benefits count ans negative cost."

this is categorically untrue.

witness how affordable food and clothing are with NO government intervention.

it is both the role of government and the role it mandates for insurers that are causing the problem.

if clothing were run like healthcare, you'd have to buy a "clothing policy" that let you buy whatever your personal shopper said you needed.

we'd all wear prada and it would wind up being incredibly expensive. no one would even bother trying to make low cost shirts.

the free market is not failing in healthcare, it's healthcare that's failing to be a free market.

there should be no limits on types of insurance so it could actually act like insurance, not an entitlement.

government assistance should be in the form of cash grants, not an unlimited buffet. imagine if they ran food stamps like medicaid. caviar and truffles for everyone!

 
At 9/20/2010 6:34 PM, OpenID Sprewell said...

The key issue here is that medical "insurance" is not insurance, high-deductible payments to pool risk for extremely unlikely events, it's medical prepayment. You pay into the system for years and may use anywhere between a fraction or many times what you paid in. Just like govt taxes or defined benefit pension plans or any other dumb commons-based good, this is a recipe for disaster. It is hilarious that dummies like Obama or Hydra then think that forcing more people to use this idiotic medical prepayment scheme is the solution, when the whole reason costs are so high is because of these silly prepayment schemes.

 
At 9/21/2010 8:49 AM, Blogger Sean said...

Sprewell,

Actually, it's the combination of high-deductible insurance and the type of prepayment you mention, which really muddies the waters. The whole health care industry still has a long long way to go before it can begin to meet its real potential: the payment system is just one aspect of that.

 
At 9/21/2010 8:24 PM, OpenID Sprewell said...

Sean, I think you mean low-deductible insurance as nobody has real high-deductible medical insurance, which would be around $15-25k at least. I disagree that payment isn't the main issue: it's the central issue as it sets the incentives that determine everything else. If we all had medical savings accounts where he had to shop around for our own medical services, like Whole Foods employees do, medicine would go a long way towards reaching its potential.

 

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