Rethinking the Uninsured Greg Scandlen

Rethinking the Uninsured We’ve been working on this issue since I first got into this business years ago. Medicaid Expansions SCHIP High Risk Pools Small Group and Individual Market Reforms COBRA, HIPAA Cost control Nothing we’ve tried has solved anything. Sometimes when a problem seems intractable, it is time to reframe the issue.

Insured versus Uninsured -- False Dichotomy This conference has added “the underinsured.” Why not “the over-insured?” Why not “the well-insured who can’t get services?” Why not “the well-insured for 8 months a year?” Why not “the uninsured who are eligible for Medicaid and can be instantly enrolled when something serious happens?” Is insurance really the point, or should it be accessing and paying for health care services?

Counting the Uninsured Uninsured (percent of non-elderly population) Uninsured all year SIPP 9.1n/a MEPS Uninsured at any time during year SIPP24.5n/a MEPS Uninsured at a point in time SIPP MEPS NHIS CPS (Source: Congressional Budget Office, May, 2003)

Counting the Uninsured Percent insured versus uninsured, SOURCE: US Census Bureau,

Counting the Uninsured In fact, virtually everyone is insured for something, and no one is insured for everything. Young males, age are the least likely to have health insurance of any age/gender category (40.7% were uninsured in 2004). But even they are usually covered for the things most likely to happen to them - auto accidents and workplace injuries. Are they really “uninsured?” At the same time, people who are considered “fully insured” are not covered for everything. People on Medicare on average spend 21.7% of their income on OOP services, according to Karen Davis, or 15.% as a median according to Patricia Neuman. Which group is better insured?

Defining the Underinsured Probably the most common definition is 10% of income spent on health care. But why, when national spending is 16%? Why is it bad to spend 10%+ on directly on health care, but not bad to spend 10%+ on taxes that pay for health care? If 10% is the standard, then Medicare is terrible. According to Banthin and Bernard in JAMA: 19.4% of Medicaid and SCHIP spent 10%+ 18.2% of privately insured But only 10.5% of the uninsured do Is it best to be uninsured?

Defining the Underinsured Food41.1%26.0%19.4% Housing Transportation Clothing Health Care Other Where Does the Family Budget Go?

Sources of HC Spending

Rethinking the Issue Considerations in Expanding Coverage: Who decides what to cover -- insurance companies, employers, the government -- or consumers? Adverse Selection versus Moral Hazard Insurance versus Third-Party Payment Risk Pooling versus Pre-Paid Health Care Pre-paid Health Care versus Post-paid Health Care Premiums versus Benefits

Third Party Payment Consumer Insurer Provider

Two-Party Contracts Consumer InsurerProvider Employer Consumer

Risk Pooling Source: World Bank, 2004:

Employer-Based Tax Subsidy, by Household Income, 2004

How Much Change is Needed?

Contact: Greg Scandlen Consumers for Health Care Choices