Paul Krugman today attempts to answer the question, “Why is the insurance industry growing rapidly, even as it covers fewer Americans?”
In 2005, the percent of uninsured was 15.9%. In 2000, it was 14.0%. In 2000, private insurers covered 72.4% of Americans or 204 million. In 2005, they covered 67.7% or 201 million.
Total number of covered individuals increased from 243 million to 249 million. From 2000-2005, the number employed rose from 137 million to 142 million. The number unemployed rose from 6 million to 8 million.
Could it be that we were experiencing a boom in 2001 and coverage peaked as a percent and that it will rise again if we have another boom with 4% unemployment? The percent of the population working has dropped from 67.1% to 66%.
Could it be that people are feeling secularly more healthy and feel like they can go without health insurance? Between 1999 and 2004, life expectancy at birth has risen from 76.7 years to 77.9 years. At least average health overall is improving by that indicator.
Could it be that the sector is over-regulated? CATO estimates that about 1/6 of daily uninsured would buy insurance if it was less heavily regulated. That would allow health care deregulation to take us from 15.9% to 13.3% uninsured and allow everyone else to save a total of $170 billion a year or $680 per covered individual per year or about 1.4% of GDP.
In short, insurers are covering more people. They are helping increase the average lifespan of all Americans. They are doing it despite a substantial burden of regulation.
Many of the uninsured are immigrants and illegal aliens. There were 8 million immigrants with a little under half of them illegal settled in the US between 2000 and 2005.
I would prefer health savings accounts to insurance. If people shop aggressively because they get to keep the last dollar they would spend on health care instead of having it heavily subsidized and pay only $0.20 on the dollar for their care like an old fashioned blue cross/blue shield plan, people would get much more value for their money. Krugman should know as an economist that if something is free it gets overused and ends up in shortage. If it is heavily subsidized, the value of the marginal dollar of use is equal to the price paid, not the cost. That is, at the margin we are wasting up to 80% of our spending. Health savings accounts–not single payor–will get us to stop wasting health service and start imposing market rigor on providers.
Single payor is a monopoly. We can’t exit any more if we switch to single payor. I want choice. Choice breeds research and development and pain amongst bad care givers. Was phone service better value for the money under Ma Bell? Competition is good. Don’t squander it.
Krugman also states:
Every other wealthy nation manages to provide almost all its citizens with guaranteed health insurance, while spending less on health care than we do. And there