Sunday, September 13, 2009

Chart of the Day

Following a prior post, newly released Census Bureau data confirm that many Americans without health insurance likely could afford it (see Table 7, page 21). Econ prof Mark Perry depicts and explains:

source: Carpe Diem

The chart above shows the household income levels of those 46.34 million uninsured Americans. There are 9.725 million uninsured Americans living in households making $75,000 per year or more, and this represents more than 1 out every 5 uninsured (21% of the total). There are about 8 million Americans without health insurance in households making between $50,000 and $75,000, representing 17.3% of the uninsured. With those two groups combined, 38.3% of Americans without health insurance (17.75 million people) lived in households with $50,000 or more of household income in 2007.
Perry also quotes Thomas Sowell:
As for those uninsured Americans who are supposedly the reason for all this sound and fury, there is remarkably little interest in why they are uninsured, despite the incessant repetition of the fact that they are.

The endless repetition serves a political purpose but digging into the underlying facts might undermine that purpose. Many find it sufficient to say that the uninsured cannot "afford" medical insurance. But what you can afford depends not only on how much money you have but also on what your priorities are.

Many people who are uninsured have incomes from which medical insurance premiums could readily be paid without any undue strain. But they choose to spend their money on other things. Many young people, especially, don't buy medical insurance and elderly people already have Medicare. The poor have Medicaid available, even though many do not bother to sign up for it, until they are already in the hospital-- which they can do then.
Agreed--and even the President dropped his estimate of the number of uninsured.

10 comments:

MaxedOutMama said...

I think you are wrong about the higher income levels. They are disproportionately older, and many people in that bracket are uninsurable. Plain and simple uninsurable. And for those who live in the states with high-risk pools, many are paying 15 to 20K out of pocket for insurance with reasonably high deductibles. Try doing that on a 60K income!

True, some are just dumb, but I would say that less than 10% of the people who theoretically could afford insurance are just going without because they don't care to buy it.

Get cancer once, even if cured, diabetes, heart disease, organ disease, neurological disease - the list is endless. You aren't going to get individual health insurance.

Btw, I have been laughing my butt off over the theory that we are suddenly going to mandate coverage of all these older and high-risk individuals while no one seems to have figured out that health insurance is abruptly going to cost a lot more, thereby throwing a lot of people who have it now off onto the govmt plans.

Thai said...

Agree with MOM. This is very much my personal experience in medicine- a large number are higher earners than you might imagine but terrible risk pool

But I do think a fair number of them "just get by" or find state money for things like cancer until they reach 65 so while I think they will cost us more, it will not necessarily be "opening the flood gates" that some suggest

OBloodyHell said...

> Agree with MOM. This is very much my personal experience in medicine- a large number are higher earners than you might imagine but terrible risk pool

Yes, but do you grasp what MoM also comments, which is that it is utterly laughable to think that insuring them isn't going to cost A LOT.

There is a reason the ones you speak of are in high-risk pools. Insuring them is NOT a cheap proposition.

They aren't placed in high-risk pools for the fun of it. Yes, you can argue that they are there because the insurance companies want to make money. But you don't make money by needlessly excluding people, either -- so the fact that some company, somewhere does not want to insure them for less says that there is a reason for them requiring that high payout for coverage.

And as opposed to a government-mandated insurance program, which, sooner or later (see the NHS piece which follows) needs to cut money. Who will they cut -- the semi-minor services to a mass of people, all of whom vote and will be pissed off? Or will the cut significant services to those in the HRP, who are far fewer and probably carry less weight as voters and in the form of lobbyists?

NOW, at least, the company you are a part of cuts your services, you can at least consider taking your business elsewhere, or even paying for a treatment yourself...

Try that when the Fed system becomes the only game in town, and you have to argue with a former DMV employee as to why you should get a service AT ALL... your self-pay option having been tossed out the window, too.

===============

"The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least amount of hissing."
- Jean Baptiste Colbert -

I don't see how the above is any less true when the taxes in question apply to health care.

OBloodyHell said...

> They are disproportionately older, and many people in that bracket are uninsurable. Plain and simple uninsurable. And for those who live in the states with high-risk pools, many are paying 15 to 20K out of pocket for insurance with reasonably high deductibles. Try doing that on a 60K income!

BTW, MoM, I'd have to say that it depends on the area in which you live. In many parts of the nation, a single individual can live on ca. 15k/year (Florida isn't exactly cheap, but I've managed to do that for extended times more than once, including a recent instance. And that's not eating dogfood, either, it's "comfortable", if not "the high life"), so that means a 60k income would leave you with 45k for such an expense. That's a more than adequate amount to pay for such things even if you also do a substantial amount of investing for the future.

Also -- if they are older individuals, are we to presume they are retired *and* have that sort of income? In which case there is no reason they CANNOT move to one of those areas of which I speak, unlike someone whose job actually ties them down to a particular location.

Obviously, if not "older", then kids may tie into that "extra money", but a spouse generally would not, as they may well, and easily, add an income (even if a small one) which compares to whatever extra expenses are added by their addition to the mix. I'll assume that they don't have the exact same high risk issues that the other member does. If that isn't the case then yes, it does play into it.


Also, MoM, not to doubt your claim, but I'd appreciate knowing your source, as I want to know what percentage of the population is represented by such a group. I find it hard to believe it's really that large a number.

MaxedOutMama said...

OBH - I always enjoy reading your comments, because they are well-informed and thoughtful.

If you strip out the illegals in casual employment (who have no incentive to buy insurance, because their care is now funded by state and federal funds), and you strip out the marginal income groups, then you get a possible pool of about 25 million. That is nearly the number of expected high-risk patients.

High-risk categories start leaping and bounding upwards in the mid-forties. The number there is still small, but at 55 it is really quite large. The boomer bulge in population indicates that our high-risk group will continue to grow quite rapidly for over a decade.

MaxedOutMama said...

On the income comments: First, I utterly agree with your implicit remark that we do not have the obligation to keep people in their own homes, etc. That is dumb.

However 60K is gross, and so is the 15K-20K premium gross.

From 60K deduct income, sales and employment taxes. Then deduct car insurance. Then factor in the copays.

Many people in the higher-risk categories who do have insurance have insurance with deductibles and copays well over 7K a year. Thus, they may pay 7K + 15K, and some other treatments won't be covered at all. It adds up quickly.

I am uninsurable, but I do get treatment. And I do live the poor life. However even if I were insured under some government plan, the non-standard treatment I receive would not be covered.

It is not that rare for some people in this group to pay 50% of their income for insurance plus medical bills.

Thai said...

MOM, agreed

I see this all the time

MaxedOutMama said...

Finally, OBH, I wanted to follow up on this segment of your remarks:
But you don't make money by needlessly excluding people, either -- so the fact that some company, somewhere does not want to insure them for less says that there is a reason for them requiring that high payout for coverage.

That is quite correct. The other reason many insurance companies won't include these people is that it would drive insurance costs so high that their premiums would be increasingly unaffordable to the average person, so they would end up with an insurance pool of high-risk people, which would drive up the costs to oh, say, 15-20K annually for coverage with a very high deductible.

When you have an aging population, average medical costs even for the healthy portion are going to rise more than three times. Just the recommended screenings assure that.

When you have an aging population, and government insurance programs that do not pay anywhere near the full cost of treatment for those covered, the private insurance companies end up subsidizing the Medicare/Medicaid/SCHIP recipients, which raises their average premiums to the point that people end up dropping insurance because they can't afford it, which means that higher-risk patients stay in the pool much longer, which causes average rates to rise again, which forces more people out.

It is a vicious cycle. The current crisis in our system is caused by two things - the demographics, and the habit of our politicians of creating entitlement programs without funding them. And Obama's proposed solution is to pass another entitlement program with even less funding.

This is a lot like dealing with an ingrown hangnail by amputating the foot. I did not know whether to laugh or to cry when I watched his healthcare speech. It was one of the most ridiculous things I have ever seen.

MaxedOutMama said...

Lastly, regarding the high-risk pool - if they are truly retirees, they'll be eligible for Medicare and then 90% of their worries are over.

But there is also a relatively large group of people in their late 50s and low sixties who can't get jobs and are unwillingly retired. Further, if they have significant health conditions they may not be able to do many jobs, and discrimination, say what we will, will prevent them from getting many that they could do.

Imagine being a 59 year old high-functioning Parkinson's patient trying to apply for the jobs that are out there. You haven't got a chance with any visible motor control problem.

Carl said...

I've been out of town, but promise to reply here soon.