July 30, 2004

NCPA - Brief Analysis 460, Uninsured by Choice: Update

This is an EXTREMELY interesting report from October 2003 about health care. We constantly hear all the Democrats and Green fear-mongering about health care wahhh wahhh health care, everyone needs health care, wahh everyone always has health care or they die immediately. Yeah, right, like nobody ever lived without health insurance before. Typical fear-mongering pansy crap. Democrats are such wimps sometimes, and I'm not talking about military service; they just fear business, fear the market, fear capitalism, fear corporations, fear products, fear that everybody is always out to screw them over if not for the intervention of big, ever-benevolent government. So it's typical they they tend to exaggerate various crises in the country and then attribute the problem to lack of government (Republicans do the same thing, especially with terror and civil liberties).

They love to talk about statistics, about how a hundred bajillion thousand infinity-trillion people don't have insurance and how everybody is dying in the streets. In 2002, about 43.6 million people were uninsured, although the record uninsured was in 1998 (in raw population; in percentages it would have been 100% uninsured before health insurance existed).

Let's look at the findings of this study that show how the typical overblown leftist whining doesn't match up to the truth.

- The uninsured rate for those in household making under $50k a year fell 17% from '93 to '02. The rate rose 57% for those in households making $50k to $75k annually and it rose 114% in households making over $75k. Conclusion? Without socialized medicine ('universal health care') rich people are losing insurance and poor people are gaining it.

This means many people are uninsured by choice, not lack of money.

- Fourteen million uninsured children and adults (five million children and 9 million non-elderly adults) are covered by various state insurance programs, and have simply failed to register. Virtually every child of low-income families is covered by state health insurance. These adults and parents simply have not yet signed up for the insurance they are eligible to receive.

This means many people are uninsured by choice, not lack of a program.

- Many uninsured are young people aged 18 to 24. Statistics show that heads of households in this young age bracket spend FIVE TIMES more on entertainment and dining than on health care. This is probably due to the priorities of young folks and to their exceptionally good health compared to older groups. The fact that they have so much to spend on luxuries shows the real reason for lack of insurance.

This means that many people are uninsured by choice, not lack of money.

- Almost all uninsured periods are relatively short. Three-quarters of uninsured people have insurance within one year. Only 2.5% of the uninsured remain uninsured for more than three years. This includes low-income uninsured households, half of which were insured again within six months.

This means that virtually everyone is insured again within three years.

- We also need to recall the distorting effects of state health care policies (e.g. Vermont under Dean) on private insurers. Many states have virtually driven out the private insurers through a variety of coercive policies. When some Democrat or leftist talks about how the market failed to provide insurance, they should realize that state policies disrupted the market and forced out otherwise-profitable insurers - it's a self-fulfilling prophecy.

This is illustrated under Dean where the number of people insured FELL during his administration, but because it started in the high 90s it still ended up in the 90s. The difference was he destroyed the private insurance market and forced most people to accept the poorly run state system. And of course the state system was funded through taxes and is projected to balloon in cost, but he never mentioned that whenever he talked about balanced budgets in the campaign. Fiscal conservative my ass. Anyway, back to the larger point.

So we should take away a few key facts:
- More than 99% of the elderly are insured.
- Virtually every low-income child is eligible for health insurance.
- Most people without health insurance will be insured again within a year, and virtually all within three years.

All of this is achieved without wholesale government health insurance, single payer, or nationalization of the health care industry.

Furthermore, statistics show that countries with socialized medicine spend much less of their GDP on health care than the US (of course, some communists brag about this, as though they give a damn about efficiency). The US attends to its health care needs much more fully, sending resources and jobs to the health industry to cover our needs. This is because the market sends profit opportunities to the service of health care. In seeking profit, companies send tons of money that way, hoping to invent some new technology or pharmaceutical to attend to our needs and thereby make a return on the investment.

Because many quasi-socialist medical policies do not allow for nearly the same level of profit-making or business-friendly environment in the health industry, they spend much less attending to the health needs of their citizens. They have to wait in those countries for the central government to appropriate money to the health care sectors and then hope it's enough to cover demand.

The market is much better at attending to our desires, and the US market shows that. What are the growing fields? Nursing, biotech, pharmaceuticals, and medical technology. Yeah, see, jobs and money go where they're needed; in Europe and Canada, jobs and money go wherever the politicians say. The result is a much slower system that doesn't listen to consumer demand and doesn't spend nearly as much as a more capitalistic system does.

Our system gives us much more attention paid to health care precisely because there's money to be made here. Simple economics, something the populists and socialists never get, and try their hardest to ignore. Asking a populist about economics is like asking a creationist about evolution. They don't get it, they don't like it, they like to pretend they have a valid alternative - but in the end it's a total load of crap built on lies and delusions.

Our policy should be simple. 1) Deregulate the system, allowing for more insurers and more hospitals, and lighten zoning regulations against the health care industry, 2) lower or eliminate taxes on health care companies, and 3) eliminate spending limits on Archer MSAs (tax shields; sort of like the Roth IRAs are tax shields for retirement, Archer Medical Savings Accounts are tax shields for all health expenses).

And by the way, MSAs are awesome, whatever you put in (there's an annual limit, also like IRAs) and then spend on health care is free, if you don't spend it on health care it gets taxed at the normal rate. According to the IRS, 71% of people using MSAs were previously uninsured - proving they are a huge success for pro-liberty and pro-market policies to improve the insured rate. It's a great system because it's so common sense, anti-tax and pro-market. It's especially great while we still have to deal with income taxes. Of course, ideally we wouldn't have to have a tax shelter because we wouldn't be taxed, but then ideally we wouldn't need health insurance because we'd never get sick.

So there you go. Make sure to read the actual report from the National Center for Policy Analysis on the subject, as linked at the top and linked right here.

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