THE PLIGHT OF THE "UNINSURED"
November 23, 2004
The United States spent $1.6 trillion on health care in 2002, yet census data indicates that 45 million people are uninsured. However, according to Greg Scandlen of the Galen Institute, there is more to this than meets the eye:
- More than 14 million of the "uninsured" are actually eligible for public health programs such as Medicaid and the State Children's Health Insurance Program (SCHIP).
- More than 15 million have incomes above $50,000 and could probably afford private health insurance; furthermore, the fastest-growing segment of the uninsured have family incomes of more then $75,000.
- Another 5.7 million are "short-term" uninsured, that is, between jobs or college graduates; young people, particularly men aged 21 to 24, account for a large portion of the uninsured, but they are covered in indirect ways -- through worker's compensation and auto insurance.
Policymakers should stop focusing on insured versus uninsured people and instead focus on insured versus uninsured services, says Scandlen. The current system favors employer-provided coverage but provides little incentive for people to purchase their own coverage. Incentives could be change din many ways, among them:
- Providing a tax incentive to individuals to purchase their own health insurance; currently, individuals without employer-provided insurance can deduct medical premiums only if they exceed 7.5 percent of their taxable income.
- Allowing consumers more market access to competing insurers by allowing them to purchase insurance from out-of-state companies and dropping some of the 1,818 mandates and restrictions that states currently impose on insurance companies.
- Using Medicaid and the SCHIP funds to fund private coverage for lower-income families and eliminating the state's role as an "insurance company for the poor."
Source: Greg Scandlen, "Rethinking the Uninsured," Galen Institute, September 24, 2004.
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