POLICY: Health care becomes like foreign policy

You might note that today in the UK the Hutton report on the Blair government, Iraq and "sexing up" was released. More on that later (although it exonerates the UK government from the "sexing up" allegation).

Over at The Businessword Don, Ross and I have been having an interesting back and forth in these comments regarding the uninsurance issue. In a nutshell, if you want a universal insurance system, in some way those who are working and have decent insurance will have to subsidize those who are working and don’t, as they make up 75% of the uninsured. Don, Ross and I agree on that, but disagree about whether we should do it and also how we should do it.  But that is the rational place to start.  We also agree that it’s not a situation that will change any time soon, and that it’s an important part of health care that deserves regular comment. As Limbaugh might say, that, my friends, is an honest platform for debate. But remember that not everything you read in the health care world is quite as honest.

In my in-box today I got a very curious missive from the Foundation for Health Coverage Education a new organization that I’d never heard of (and I tend to follow Foundations in California out of egregious self-interest!).  But OK, these folks say they want to promote education about the many federal and state health care coverage programs in California, which all sounds very worthy, and they have a press release about their new online tool that does that. Wa-hoozlle! 

However, on slightly closer reading I noticed that this Foundation is run by an insurance broker:

    Philip Lebherz has been working to help Californians obtain health coverage since 1977. Although Lebherz is president and CEO of LISI health care insurance brokers, he is strongly opposed to not only tax penalties on individuals or employers who choose not to purchase insurance but also any government mandates to buy insurance.

So I’m already a little suspicious, and then it continues

    Although many journalists have reported between 6-7 million uninsured in California, the real number appears to be less than one million according to the Foundation’s interpretation of a Blue Cross Blue Shield Association analysis of the 2002 Census Bureau (news – web sites). Of the 6.17 million classified as "uninsured," 2.97 million are eligible for public insurance benefits but are not yet enrolled, an additional 2.16 million have annual household incomes of more than $50,000 per year, and 652,000 are temporarily uninsured, primarily due to changes in employment. That leaves approximately 938,000 who would be characterized as truly uninsured.

The Foundation claims that 90% of bills incurred by the uninsured are eventually paid off, and therefore forcing them to buy insurance would deprive them of the ability to buy housing, cars, food etc.  This is indeed beautiful voodoo economics.

So half the uninsured are voluntarily uninsured? Lebherz may not have noticed but the public programs that he thinks are just waiting to take in 3 million Californians have no money–all over the country they are cutting rolls rather than adding to them. Has he heard of our little budget problem and the consequent Medi-Cal cuts?

As for the rest, well the numbers are pretty dubious.  According to Kaiser Family Foundation 64% of the nation’s uninsured come from households with incomes less that 200% of poverty (~$26,000) (go to page 8 in the link for more), and only 19% make 300% or more, which equates to about $39,000.  Somehow in the Lebherz analysis this equates to 35% of uninsured Californians are in households making more than $50,000. But even if that’s right a good chunk of these folks would love to have health insurance but cannot find affordable insurance in the individual market. As I’ve posted before, I know because I’ve tried as have my friends–and I think that paying $4,000 to $12,000 a year for health insurance coverage with a $2,000 deductible and many exclusions is not realistic for many households even those with incomes more than $50,000 a year.

The problem is of course twofold. 1) We end up with very little contribution into the insurance pool from the uninsured, and it’s clear that they could probably come up with at least half of the balance required for the nation to get to universal coverage. And 2) more importantly from the point of view of the safety net system, dealing with the uninsured is a hugely inefficient financial train wreck.

However, the real point of this new "Foundation" is that no rational system would need a huge amount of waste motion otherwise know as the health insurance brokerage market–so any attempt to sell the current system as being "not in any real trouble" is all Lebherz and his ilk care about. So you can just lie and keep repeating the lies and maybe someone will believe you, or as in the UK focus on the irrelevance of whether a single claim was "sexed-up" or not. Oh yes and there really were WMDs, WMD programs, Al-Quaeda terrorists, a bad guy called Saddam in Iraq, and health care’s getting more and more like foreign policy everyday

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