How Many People Are Uninsured? Part 1

Stanley Feld M.D.,FACP,MACE

We are overloaded daily by the media with statistics, percentages and facts on many topics. This is especially true for the healthcare system. The important question is which facts are the important ones. Some findings are statistically significant, others are not. The media does not report the statistical significance of most studies. It simply publishes the conclusions. Conclusions are often conflicting because many studies are poorly designed and not statistically significant.

A large issue of concern today is the number of uninsured people in the United States. The actual number of uninsured and the significance of the number are subject to debate. A key question not addressed is what is the reason people do not have healthcare insurance?

The definition of healthcare insurance is “insurance against expenses incurred through illness” Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss.

The important issue is not the number of people who are uninsured. The issue is why are these people uninsured? It seems silly not have health insurance. No one should be uninsured. This is the definition of universal healthcare insurance. Why people choose not to be insured is an important question. Answering this question would focus us more clearly on the solution to the uninsured. If a person chooses to be uninsured and gets sick he will suffer great economic loss in addition to health loss. Everyone is at risk for medical catastrophes. If a person is does not have health insurance that person is liable to be bankrupted by a medical illness. If one is poor or bankrupted, society (everyone) pays for their medical illness indirectly through taxes.

Some might chose to be uninsured because they do not perceive themselves to be at great risk of illness. The purpose of healthcare insurance should be to protect a person against an expensive illness. Young people might think they are at little risk. They might perceive they do not need health insurance. However, when a young person gets sick they usually have a very expensive illness. This is all the more reason they should choose to be insured. The number of young people uninsured and the reason for the lack of insurance should be studied. The uninsured young need to be educated to appreciate the value of healthcare insurance.

Many people are uninsured because they can not afford adequate healthcare insurance. The cost of health insurance is rising at double digit levels each year. The healthcare insurance industry is making unconscionable profits as premium rise. Is there an opportunity for an insurance company to provide affordable insurance at a reasonable profit? I think there is. I also think that selling insurance to the 47 million uninsured at an affordable price would increase the healthcare insurance industry’s profit, increase competition among the healthcare insurers and lower the premiums.

However the healthcare insurance industry does not want to lose control over pricing of insurance policies. The only way keep control over the healthcare system is to maintain the status quo. It would be ridiculous to let common sense get in the way and potentially endanger profits. The healthcare insurance industry does not seem to understand that they are setting themselves up to kill the goose that laid their golden egg. Hillary Clinton along with the other Democratic candidates is carrying the shotgun. I predict the results will be catastrophic to the delivery of medical care in a regulated healthcare system.

Another important question is how many people not in a group insurance plan are uninsured because the healthcare insurance company declares them uninsurable as individuals?

An example is a 55 year old male with obesity, hypertension, and type 2 diabetes. He is an uninsured self employed consultant. He was laid off nineteen months ago by the information technology company he worked for. His COBRA coverage has expired. COBRA coverage was paid for with after tax dollars. When his employer paid the premium for group insurance it was paid for with pre tax dollars. He tries to buy healthcare insurance. He is declared uninsurable by multiple healthcare insurance companies. What can he do? He makes too much money to go on Medicaid. He is not old enough to be on Medicare. He is stuck and on the uninsured rolls and terrified that he will get sick.

Most states have high risk insurance pools. This is required of the healthcare insurance industry by many states. If they do not participate in the high risk pool they can not get a license to sell insurance in those states. All the insurance companies are combined to pick up the high risk pool insurance. Most states omitted rules to require the pooled high risk insurance premium to be affordable. The insurance company determines the actuarial criteria. The patient applying for the pool must pay with after tax dollars. The barriers to entry are also high. The patient might experience exclusions for the illness that is so important to insure against. For example the complications of diabetes might be excluded in a patient with diabetes. The only way this patient can get adequate health insurance is by being in a large group that provides healthcare insurance to its employees. In the group plans the healthcare insurer is required to take all patients at all risks into the plan.

If the patient is approved for the high risk pool the premium is extremely high. The patient usually can not afford the premium using post tax dollars.

Another example is a 42 year old Hispanic male who has been a US citizen for 12 years. He is a handyman and jack of all trades in rural Texas. He makes a living that barely supports his family of four. He has two children age 3 and 8. He is terrified that his children will get sick. He can not afford healthcare insurance. He is qualified for Medicaid. When each child was born he got Medicaid coverage for each of them. However Medicaid dropped them after one year of coverage. He made an extraordinary number of phone calls in an effort to discover the reason for the discontinuation of the Medicaid insurance. He and his wife are also eligible for Medicaid. However their applications have never been approved or disapproved. He has no time to appear in the Medicaid office from 9-5 because he is working for an hourly wage and needs every dollar to feed his family. The inefficiency of the bureaucracy is exposing this hard working man to the disastrous economic effects of a medical illness, the very issue Medicaid is supposed to protect him from. He and his family is one of the forty seven million uninsured.

Unfortunately, many healthcare experts ignore these issues in calculating the number uninsured. The fact is many of these people have no choice but to be uninsured because of price and exclusions, and other barriers to adequate healthcare insurance.

The solution is obvious. It is either a single party payer system or healthcare insurance reform. I believe a single party payer system will be a disaster. Our present healthcare insurance system is a disaster.

The choice is clear to me. It is going to take” People Power” to force a change in our present healthcare insurance system. The Repair of the Healthcare System has to be directed to consumer driven healthcare.