Category: Health Insurance

What are the Financial Risks of Being Uninsured?

Previously, Chris Conover showed that the medical risk of being uninsured is small:

…[T]he evidence that having health insurance will reduce mortality risk by any significant amount is pretty thin…even if we assume that having coverage reduces the chance of early death by 22 percent, this is comparable to a half dozen other risks that people face. For the same amount as we are spending to expand coverage under ObamaCare, we could save eight times as many lives by focusing on other causes of death such as smoking.

See also his analysis of the claim that failure to expand Medicaid kills people and Linda Gorman on the same subject at this blog.

In his latest post, Conover shows that the financial risks are small as well:

I have calculated the medical bankruptcy risk facing those with continuous coverage at 1.25 per 1,000. Eliminating this difference would evaporate the risk of medical bankruptcy for 1.89 people out of every 1,000 uninsured Americans every year.

…[I]f having coverage could reduce bankruptcy risk by 1.89/1,000, what would that mean? First, the overall difference in bankruptcy risk (inclusive of medical and non-medical causes) between those with health insurance and those without is 10.7 per 1,000, so eliminating the “excess” risk of medical bankruptcy that we are assuming can be attributed to lack of health insurance coverage would shrink this difference by less than 20%. Perhaps more astonishing, such a reduction would shrink an uninsured person’s overall bankruptcy risk by a mere 11% (from 17.9 to 16.1 per 1,000).

Tax Preparers Earned Bounties to Sign People Up For ObamaCare

ObamaCare’s open enrollment was supposed to close on March 31. Then it was extended to April 15 — Tax Day. The Administration chose that date for a deliberate purpose: Tax preparers were paid to enroll people in ObamaCare. The Administration has a number of ways to pay people who are not licensed insurance agents or brokers to recruit ObamaCare applicants. A self-employed tax preparer of my acquaintance told me that his tax-preparation software vendor offered him $50 “per scalp” that he enrolled in ObamaCare. (Here’s the vendor’s website offering “referral fees“.)

Employers Switch from Commercial Insurance to Self-Insured Plans

According to Citibank’s top ranked analyst Carl McDonald:

By our analysis, since 2002, risk enrollment at the publicly traded plans has fallen by over 14 million lives…The emergence of private exchanges that rely on a risk model (like the exchange product offered by Aon Hewitt) could help slow the loss of risk enrollment but the benefits of self-funding are so significant for many employers that we believe risk enrollment will continue to shrink.

Cooking the ObamaCare Stats?

caduceus_blogOut of the blue, the Census Bureau has changed how it counts health insurance — at the precise moment when ObamaCare is roiling the insurance markets.

Since 1987, the Current Population Survey, or CPS, has collected information on the health-insurance coverage status of Americans. The annual reports are widely cited because their large sample sizes improve accuracy, the data are gathered constantly, and they tease out state-by-state details. But this year the Census revamped the CPS household insurance questions, muddying comparisons between the pre- and post-ObamaCare numbers. The results of the new method will be disclosed this fall. (WSJ)

Deductibles in ObamaCare Exchanges

dfgFrom the Heritage Foundation, ObamaCare in Pictures.

Early ObamaCare Exchange Enrollees Are Much, Much Sicker Than Other Insureds

Express Scripts, the country’s largest provider of pharmacy benefits, has released its First Look at medication utilization in the exchanges.

Variety of Medicine in Pill Bottles[U]se of specialty medications was greater among Exchange enrollees versus patients enrolled in a commercial health plan. Approximately 1.1% of total prescriptions in Exchange plans were for specialty medications, compared to 0.75% in commercial health plans, a 47% difference. Increased volume for higher cost specialty drugs can have a significant impact on the cost burdens…Specialty medications now account for more than a quarter of the country’s total pharmacy spend.

In total spend, six of the top 10 costliest medications used by Exchange enrollees have been specialty drugs. In commercial health plans, only four of the top 10 costliest medications were specialty.

What Are the Mortality Risks of Being Uninsured?

This is from Chris Conover:

Since the evidence is equivocal at best, let us — for purposes of discussion — average the point estimates from 4 studies…and compare this relative mortality risk (1.22) to other factors that elevate the annual probability of death.

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Parsing the Numbers

This is from RAND:

  • Of those who were previously uninsured but are now insured, 7.2 million gained [employer-sponsored insurance], 3.6 million are now covered by Medicaid, 1.4 million have signed up through a marketplace, while the remainder gained coverage through other sources.
  • Our estimates suggest that only about one-third of new marketplace enrollees were previously uninsured. While this percentage seems low in absolute terms, it is slightly higher than an earlier figure reported by McKinsey & Company.
  • Less than one million who previously had individual market insurance transitioned to being uninsured.

Paying For Health Care Second Most Important Driver of Canadians’ Financial Planning

Dundee Goodman, a Canadian wealth-management firm, surveyed clients with over C$100,000 in investable assets. Investing for retirement income was their most important goal. The second was health care.

While investors under 50 (34 percent) are least likely to identify health care as a priority, the overall average was 46 percent…And even among respondents with $1 million+ to invest, 41 percent identify “health-care needs” as an important investment objective.

This may come as a surprise to those who believed President Obama when he said that expanded health insurance would prevent people from going bankrupt because of ill health. Even in Canada, with a single-payer, government-monopoly health system that is the envy of central planners in the U.S., illness seems to threaten financial security.

As we have previously reported, the expansion of health insurance does not seem to have much impact on personal finance:

The Canadian-based Fraser Institute finds that bankruptcy rates in Canada are very similar — if not slightly higher — than rates found in the United States and there is no difference between bankruptcy rates in Massachusetts and the United States as a whole.

More and More of Your Income is Health Insurance

In 1980, in-kind benefits and employer and government spending on health insurance accounted for just 6% of the after-tax incomes of households in the middle one-fifth of the distribution. By 2010 these in-kind income sources represented 17% of middle class households’ after-tax income (see Chart 4). The income items missed by the Census Bureau are increasing faster than the income items included in its money income measure.

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Source: Brookings.