Health Status Related to Income Not Insurance

Women joggingAn extremely thorough analysis of changes in incomes and mortality in the United States, 2001 through 2014 presents some sobering conclusions for those who think fixing our health system will make us healthier. The research, let by Raj Chetty of Stanford University, ran data on incomes and mortality through a battery of statistical tools.

It is well understood that people in high-income households are healthier than those in low-income households. The latest research demonstrates how important incomes are to health status. Forty-year old men in households in the highest quartile of income (mean = $256,000 annually) had an average life expectancy just under 85 years in 2001. This increased by 0.20 years (a little over ten weeks) by 2014. For those in the lowest quartile ($17,000), life expectancy was about 76 years in 2001, and it only increased 0.08 years (a little over four weeks) by 2014.

Obamacare is likely to accelerate this gap, because it significantly reduces incentives for people in low-income households to increase their incomes.

The research really gets interesting when it explores other factors explaining lifespan. Unsurprisingly, smoking, obesity, and exercise were moderately significant factors for people at all income levels. However, other factors had opposite effects at higher incomes than lower incomes.

The researchers looked at lifespans in different areas of the country, by quartile. In the top income quartile, the uninsured rate was moderately associated with shorter lifespans, as was Medicare spending and hospital mortality, while access to preventive care and “social capital” were moderately associated with longer lifespans. Income inequality (within the quartile), unemployment, and immigrants were moderately associated with shorter lifespans.

However, when it comes to the bottom quintile, neither the proportion of uninsured, nor Medicare spending, nor preventive care have a significant relationship with lifespans. Counter-intuitively: Income inequality and unemployment have a marginally positive relationship with longer lifespans, while “social capital” has a marginally negative relationship. The single strongest favorable factor is the proportion of immigrants. It is likely that immigrants to low-income neighborhoods are healthier than the native born.

These findings lead to dramatic policy conclusions: Getting health insurance to people in low-income households is not important for their longevity. More important is allowing them opportunities to increase their incomes. That would be the opposite of Obamacare.

Comments (12)

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  1. Barry Carol says:

    There was an interesting article published yesterday in the WSJ about the life expectancy gap between whites and blacks over time. According to the authors, in 1970, whites lived 7.6 years longer than blacks (72 vs. 64.4). By 2010, the gap was down to four years (79 vs. 75) in large part because we are doing a better job of managing chronic disease, especially for black women.

    Interestingly, according to the authors, fully one year of that four year gap is attributable to the difference in the incidence of death by homicide. While blacks account for only 13% of the U.S. population, they account for 50% of all homicide victims. Indeed, the single biggest cause of death for blacks between the ages of 1 and 44 is homicide. Maybe we should focus more on fixing that.

  2. Jimbino says:

    Social Security, being one of the many manifestations of latent racism in our society, long started benefit payouts at age 65, a year or more after our typical male Black Amerikan, though a lifelong contributor, was expected to be dead. By all logic, SS should now raise the retirement age to closer to 70, so as to keep depriving Black Amerikans of their benefits due. Such a proposal is underway, I read.

    We have successfully barred Black Amerikans from full participation in our vaunted state universities and national and state parks and forests. As with racist SS, our minorities pay but don’t participate. How long will it take Amerikans to realize that socialism implies taxing the poor to favor the rich?

  3. John Fembup says:

    “sobering conclusions for those who think fixing our health system will make us healthier.”

    Perhaps yet another illustration that what you don’t know often gets you in less trouble than what you do know that ain’t true.

  4. John Fembup says:

    “Maybe we should focus more on fixing that.”

    Barry, I agree.

    In fact, reducing the homicide rate can be thought of as a “demand management” technique. Seems to me other cost-generating elements in our system might be susceptible to demand management.

    For instance, Americans have poor diets; we don’t get enough sleep, or exercise; we still smoke far too much and abuse alcohol and other drugs; physical violence, crime, and stress result in ailments and disabilities that cost billions to treat; same is true for injuries from auto accidents.

    There’s more but that’s enough. Americans are in denial when we think a supply-management strategy (controlling the supply of medical care, or insurance, or money) can succeed by itself in bending the cost curve. In fact, we now have decades of experience showing that it cannot. Above all we are in denial to believe we need not alter our own behaviors in order to manage the cost of our present system.

  5. Bob Hertz says:

    Aaron Carroll who blogs at Incidental Economist would disagree with you, John. He feels that violence, obesity, and other behaviors do not explain our high health costs….

    Anecdotally I would disagree also. Germans smoke more, Japanese probably have more stress, etc. The most expensive heart and cancer clinics rarely if ever see a victim of violence.

    In my view, the reason that American rationing has not bent the cost curve is that it has not been very tough rationing. Medicare’s attempts to enact competitive bidding or the ‘doc fix’ have gone nowhere. Restrictions on hospital bills for persons under 65 are only now starting to appear, state by state.

    In other, smaller countries, you have more powerful central governments and fewer doctors who are entrepreneurs. Hospitals in those countries have been under price controls for 50 years (in Germany, for 150 years).

    The relative independence of American providers and drug companies is not all bad. It just makes cost control much harder to achieve.

    • John Fembup says:

      So Bob, you appear to suggest that rationing alone can indeed solve our medical cost problem if only it were tougher. And you seem to believe that Americans’ health behaviors are just fine and do not add significantly to our overall medical costs.

      Perhaps you don’t really believe those things. I certainly don’t. Despite the presence of what you call “tough rationing” in other countries, their medical costs also continue to rise. They have not solved that problem. Some developed countries are now approaching the ratio of medical cost to GDP that the US experienced in the 1980’s. Sure, we still lead the pack; and they’re still following us up the same road.

      Besides, if you re-read my earlier comment, you will see that I nowhere claim demand management could solve our cost problem by itself. What I said was this: Americans are in denial when we think a supply-management strategy (controlling the supply of medical care, or insurance, or money) can succeed by itself in bending the cost curve. In fact, we now have decades of experience showing that it cannot. Perhaps you missed “by itself”. What I’m saying is that we need more tools – and demand management is a good candidate.

    • Aaron Carroll is an excellent health economist and a pleasant person to meet in person. The chart is great. I agree “lifestyle” issues cannot explain everything. However, when you combine lifestyle with other factors, there is some there there. For example, black and white Americans of same socio-economic group have different health status. And the Hispanic health paradox – which some claim does not exist.

      It is hard to say because the U.S. (on the graph) is the last data point in the series. I will write more on this in a blog post.

      • Devon Herrick says:

        There is also evidence that poor people living near wealthy people imparts a beneficial health risk. I assume this refers to the influence of lifestyle that wealthier people exhibit and is picked up by lower-income people.

  6. Devon Herrick says:

    About 82% of Obamacare enrollees receive income-based subsidies. Even when controlling for health status, the fact most enrollees receive subsidies suggests their medical costs could be higher than similar health risks with higher incomes.

  7. Bob Hertz says:

    This whole thread is kind of gnarly, but not because of any ill-will amongst the writers. We all know that lifespans are influenced by genetics, personal habits, family life, et al.

    This is why the Oregon Medicaid study showed relatively limited improvements despite free health care. People who are poor lead more troubled lives in terms of violence and addiction, and no amount of free health care can overcome these ailments. (Indian reservations have had free health services for many years, with the lowest life expectancy in the nation.)

    Devon’s last comment seems kind of incomplete. I mean he is right, but the reason is more subtle than just the subsidies. My agency enrolls people in Obamacare and in off-exchange plans. What we see in the flesh is that people who wade through the dreadful online exchanges are people who really want health insurance — and they are in fact less healthy, and they know it.

  8. Mary says:

    Why Getting health insurance to people in low-income households is not important for their

  9. Mary says:

    What is their actual fee schedule?