08 April 2009

Health Care Safety Net Still Broken

The biggest problem with the health care in the United States is that so many people are uninsured. Colorado is no exception.

Almost one-third of Coloradans younger than 65 did not have health insurance at some point during the past two years [1.4 million], and most of them were uninsured for at least six months . . . 32.1 percent of Coloradans younger than 65, who don't qualify for Medicare, went without insurance in part of 2007 or 2008. That's up from 29.6 percent in 1999-2000. Colorado did better than the national average of 33.1 percent. . . . In Colorado and other states, single people and couples without kids do not qualify for Medicaid, no matter how poor they are. . . . More than 56 percent of Latinos did not have insurance for some portion of the two years. In comparison, 41.7 percent of African-Americans and 25.2 percent of whites did not have insurance. More than three-quarters of uninsured Coloradans did not have coverage for at least six months. More than 83 percent of the uninsured came from families where someone worked full or part time.

Indirect costs that flow from having a system where a large percentage of people lack health insurance is one important reason that the cost of health care is so high.

Meanwhile, the Douglas County School system is switching their health insurance system to a high deductible plan with a health care savings account. These plans have a place in a private insurance based health care insurance market (I will be moving to such a plan in May). They are better than nothing and they are particularly attractive for older people under age sixty-five with significant savings and bueaucratic savvy who are in decent health. But, they are a poor model for the young individual and families with lower incomes who make up a large share of the uninsured.

HSA plans are gaining market share since they are perceived as a way to control soaring health insurance costs generally.

The facts are less clear. Useful information about health care provider costs necessary to engage in the comparison shopping necessary for market pricing to drive down prices is hard to secure in the time frames necessary for an individual seeking care. Not getting health care when necessary is often pennywise and pound foolish. HSA plans can encourage thrift when one is generally healthy, but when a patient's share is exhausted in a year, the plans often encourage wasteful spending -- despite the fact that a disproportionate share of total health care spending involves a fairly small number of high cost patients in any given year, so it is these cases where incentives have the most potential to control provider costs if the right information is available.

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