Prior to the November
election, presidential candidate Senator John Kerry (D-MA) wrote in an
October essay for Health Insurance Underwriter magazine, "Roughly 45
million American have no health insurance at all."
Ever
since the U.S. Census Bureau released its August 26, 2004 report on the
nation's uninsured population, politicians have used the data to make health insurance
policy decisions, and single-payer activists have used the data to
lobby for government-mandated or -administered national health
insurance. By the Bureau's own admission, however, the data are
incorrect: The number of uninsured is greatly overstated. After a closer look at the data released in August and a
consideration of analyses performed since then, a more accurate picture
of the uninsured problem emerges. The good news is that the number of
Americans without health insurance policies is not indicative of a
crisis requiring more taxpayer-funded government regulations and
mandates. The bad news is that policymakers are relying on extremely
flawed data.
According
to the Census Bureau's methodology and published numbers, there were
44.9 million Americans without health insurance for at least a part of
2003, an increase of approximately 3 million over the previous year's
figure. At the same time, however, the total number of people with
insurance increased by one million, to 243.3 million. Devon Herrick, senior fellow at the National Center for
Policy Analysis (NCPA), noted, "While it is true that the number of
uninsured has grown, it is equally true that the number of people with
insurance has grown steadily for the last 15 years. Despite recent
economic hard times, there has never been this many people with health
insurance." Although there were three million more people uninsured in
2003 than in 1996, the percentage of the U.S. population that is
uninsured remained the same, at 15.6 percent.
On
numerous occasions, Census Bureau officials have acknowledged the
uninsured number is inflated because the Bureau reports as "uninsured"
those adults and children who are eligible for Medicaid and the State
Children's Health Insurance Program (SCHIP) but are not enrolled. As Herrick observed, "Being uninsured in America is often
a matter of choice. Most uninsured people either can afford health
insurance or qualify for government-sponsored health care programs;
they just choose not to enroll." While the Centers for Medicare and Medicaid Services (CMS)
reported Medicaid enrollment at 51 million in 2002, the Census
tabulated only 33 million, a difference of 18 million people. This same
kind of undercount happened again in 2003: The CMS reported 2 million
people became eligible for Medicaid, but the Census Bureau recorded
only a 350,000 increase in Medicaid enrollment. This is no minor statistical snag, as the Census Bureau
reports there are more than 15 million "uninsured" individuals in
households with less than $25,000 of income. Many of these individuals
meet the income test for Medicaid or SCHIP eligibility, but they are
not technically enrolled and are therefore considered by the Census
Bureau to be uninsured. However, as soon as a person who is eligible for Medicaid,
but not enrolled, enters the health care system through a hospital or
clinic, he or she is automatically enrolled into the Medicaid plan.
Therefore, counting this population as "uninsured" distorts the data
significantly, since these individuals can enroll at any time and have
their medical expenses paid whenever they require health care. The social policy implications of this over-count are
important because the inflated numbers send the wrong message to
politicians. One of Kerry's health care proposals singled out the
Medicaid population for special legislation. His campaign literature
stated there are "millions of uninsured children who are eligible for
health care coverage under Medicaid or SCHIP but are not enrolled." Given that no one who is
eligible for Medicaid can be correctly described as uninsured, spending
millions of dollars to enroll these people would do no one any good at
all. These folks are not uninsured.
In
addition, many people may not be aware that they or their children are
covered by a health insurance program, either private or government, if
they have not used covered services recently. Thus, they fail to
properly report their insurance coverage. Research I conducted in 1999 while at the Center for
Advanced Social Research at the University of Missouri-Columbia
discovered many Medicaid recipients say they don't have insurance
coverage, but when interviewed by a trained researcher and asked if the
government paid for their medical care, they respond in the
affirmative. When asked if they remember the name of the program, they
cite Medicaid and sometimes Medicare. Many interviewees said they don't
consider government-run health care to be insurance because they do not
pay premiums and often have no co-pays or deductibles. Also inflating the uninsured figure is a sizeable increase
in the nation's immigrant population. Roughly 9 million documented and
undocumented aliens are generally included in the Census estimates.
Many immigrants hesitate to participate in a government program of any
kind, for fear of establishing a paper trail for immigration and
national security authorities. Cultural mores, folkways, and language
barriers also conspire to keep these people uninsured.
Interestingly,
the Census data for 2003 show almost 15 million uninsured people in
households with annual incomes above $50,000, with 7.6 million of them
in households with incomes of more than $75,000. That is certainly
adequate income to afford health insurance in most states. Another 18 million of the uninsured are between the ages
of 18 and 34, and many people in that age group voluntarily take a pass
on buying health insurance. According to Greg Scandlen, director of the
Center for Consumer Driven Health Care at the Galen Institute, "This
attitude is actually encouraged by 'guaranteed issue' laws in many
states, which assure individuals that they can buy health insurance
after they become ill or injured."
Data
from three federally sponsored national surveys--the Survey of Income
and Program Participation (SIPP), the Medical Expenditure Panel Survey
(MEPS), and the National Health Interview Survey (NHIS)--also seek to
make an accurate count of the nation's uninsured population. All three surveys conclude that at any given time during a
year, being uninsured is a much smaller problem than we are led to
believe by the Census data alone. For example, only about 30 percent of
the non-elderly population who become uninsured in a given year remain
uninsured for more than 12 months. Nearly 50 percent regain health
insurance within four months. Writing in response to the new Census data, Dr. Kirk A.
Johnson, senior policy analyst for the Center for Data Analysis at The
Heritage Foundation, highlighted the problem of taking the statistics
at face value. The Bureau's numbers may make for eye-popping headlines,
he noted, but, "When it comes to health insurance, the Census Bureau's
own statisticians argue that SIPP [Survey of Income and Program
Participation] provides a better measure of health insurance coverage
than CPS [Current Population Survey]. In a recent research report on the differences between CPS
and SIPP in this regard, Census Bureau statistician Shailesh Bhandari
wrote, 'Since the SIPP collects monthly information and allows us to
see changes from month to month, SIPP may be closer to the truth.'" "In short," wrote Johnson, "the CPS data provide an
incomplete picture on poverty and health insurance in America.
Policymakers would be well advised to look to other data, such as SIPP,
to gauge what actually happens to people who fall into poverty or lose
their health insurance. Only then will public policy be fully informed,
and America can truly have an intelligent debate on how to better
address these problems." The Census Bureau's own admission that the CPS "is not
designed primarily to collect health insurance data" speaks directly to
the issue that the methodology used to collect this important
information is not up to the task.
Grace-Marie
Turner, president of the Galen Institute, suggests that since the
uninsured rate has been static for the past 11 years, policy analysts
and policymakers need to get their thinking "out of the box." "We would be gloomy were it not for last year's public
policy changes that can begin to shift the balance back to private
health coverage," said Turner. "Health Savings Accounts will help.
Broader ownership of health insurance is the ultimate solution." The percentage of Americans without health insurance
has been almost level for more than a decade. In 1993, the year of the
great health care crisis, it was 15.3 percent. Last year, a nearly
identical 15.6 percent of Americans were uninsured. "At what point do we start to rethink the problem?"
Turner asked. "The number of uninsured is slowly going to get worse
without policy changes. " Adding 45 million people to government
program rolls just isn't an option," she noted. "Refundable tax credits for the uninsured,
deductibility of individually purchased health insurance, and new
purchasing options are crucial to begin to give more people more
options to buy affordable health insurance--insurance they can take
with them even if they lose their jobs." Derek Hunter, a research assistant for the Center for
Health Policy Studies at The Heritage Foundation, summed up the
situation in his August 26 report, Counting the Uninsured: Why Congress Should Look Beyond the Census Figures.
"At
the very least, the undercounting of Medicaid recipients and the
undercounting of insurance coverage, as admitted and described by
Census officials, demonstrate that the Census Bureau's figures on the
uninsured do not accurately reflect reality and may lead policymakers
and the public to incorrect impressions about the uninsured." "The issue of uninsurance is simply too important for
its public face to come from an indifferent and inaccurate survey,"
wrote Hunter.
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