Uninsured Get a Reality Checkup

Published May 3, 2003

The estimates of uninsured usually touted to justify intrusive government health care policy don’t hold up under careful scrutiny.

Richard Gephardt’s grand gesture pushing universal medical coverage is yet another example of how insurance statistics can be manipulated by those inclined toward socialized medicine. Like many proponents of expanding Washington’s health care role, the Missouri congressman points to 41 million uninsured Americans as proof of his program’s need.

Gephardt’s sweeping proposal makes for good politics as he bids to separate himself from a crowded Democratic presidential field. Good politics, however, is usually antithetical to good economic policy.

First, it must be remembered that health care is always available, through hospital emergency rooms if nowhere else. This approach is criticized as unduly costly and inefficient, but such claims ignore the cost of alternatives such as Gephardt’s. A recent study indicated uninsured Americans received about $35 billion worth of health care in 2001.

When unveiling his plan, Gephardt estimated the cost at nearly $700 billion in the first three years. He proposes to pay for it by repealing previously legislated tax relief and forgoing future tax cuts. Businesses would be forced to provide health care benefits whether they could afford to or not. Government would expand existing safety nets for the neediest.

The critical question here is whether the trade-off is justified. Is the uninsured problem as dire as the 41 million figure seems to imply? Research indicating it isn’t doesn’t get near the attention it should. Conrad F. Meier, managing editor of Health Care News, recently analyzed a Blue Cross and Blue Shield Association report putting the situation into revealing perspective.

The study shows 15 million of the uninsured have incomes of $50,000 or more. The fastest-growing population of uninsured has incomes exceeding $75,000. About 14 million are eligible for Medicaid or the State Children’s Health Insurance Plan but are not enrolled. More than 5 million are in three states with the highest number of undocumented immigrants.

Moreover, says Meier, who is also senior health policy fellow for the Heartland Institute, the 41 million figure is suspect. Studies indicate, he says, that “about half were uninsured for brief periods, often between jobs.”

What do these numbers tell us? They tell us there are many reasons people don’t have medical insurance. Some are in dire circumstances, some aren’t. Thus, a humongously expensive one-size-fits-all remedy would be both ineffective and horrendously wasteful. This is especially so if it would cripple the small businesses that create most of America’s jobs.

As long as government wants to mandate health care insurance, why put the whole burden on business? For starters, why not require individuals to buy coverage if they can afford it? If vehicle users are required to have insurance, why not potential users of the health care system?

It makes more sense than risking economic harm to many millions more than would be helped–some undeservedly–by fiat health insurance.

Jerry Heaster’s column appears Wednesdays, Fridays, Saturdays and Sundays. To reach him, write the business desk of the Kansas City Star at 1729 Grand Boulevard, Kansas City, MO 64108; call 816/234-4297; or send email to [email protected].