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.
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