March 15, 2010

CATASTROPHIC COVERAGE AND A SAVINGS ACCOUNT:

Obama's illusions of cost-control (Robert J. Samuelson, March 15, 2010, Washington Post)

You probably think that insuring the uninsured will dramatically improve the nation's health. The uninsured don't get care or don't get it soon enough. With insurance, they won't be shortchanged; they'll be healthier. Simple.

Think again. I've written before that expanding health insurance would result, at best, in modest health gains. Studies of insurance's effects on health are hard to perform. Some find benefits; others don't. Medicare's introduction in 1966 produced no reduction in mortality; some studies of extensions of Medicaid for children didn't find gains. In the Atlantic recently, economics writer Megan McArdle examined the literature and emerged skeptical. Claims that the uninsured suffer tens of thousands of premature deaths are "open to question." Conceivably, the "lack of health insurance has no more impact on your health than lack of flood insurance," she writes.

How could this be? No one knows, but possible explanations include: (a) many uninsured are fairly healthy -- about two-fifths are age 18 to 34; (b) some are too sick to be helped or have problems rooted in personal behaviors -- smoking, diet, drinking or drug abuse; and (c) the uninsured already receive 50 to 70 percent of the care of the insured from hospitals, clinics and doctors, estimates the Congressional Budget Office.

Though it seems compelling, covering the uninsured is not the health-care system's major problem. The big problem is uncontrolled spending, which prices people out of the market and burdens government budgets. Obama claims his proposal checks spending. Just the opposite. When people get insurance, they use more health services. Spending rises. By the government's latest forecast, health spending goes from 17 percent of the economy in 2009 to 19 percent in 2019. Health "reform" would probably increase that.

Posted by Orrin Judd at March 15, 2010 5:39 PM
blog comments powered by Disqus
« WHAT DOES HILLARY HAVE TO DO WITH THE OBAMA ADMINISTRATION?: | Main | JIMMY CARTER NEVER LIKED IT EITHER: »