Care not health insurance

April 16, 2008

Free Market Foundation

The conventional wisdom among health experts across the ideological spectrum is that people need health insurance to get good health care. But among people who seek care (actually see a doctor), RAND researchers found virtually no difference in the quality of care received by the insured and uninsured, says John C. Goodman, president of the National Center for Policy Analysis.

In addition, innumerable studies have claimed the uninsured get less health care than the insured. The most recent and well-known is an Institute of Medicine (IOM) study that claimed 18,000 people die every year because they do not have health insurance. However, the IOM study failed to make the crucial distinction between people who seek care and those who do not, says Goodman:

Of the 47 million people in the U.S. who are uninsured at any one time, more than one-in-four or about 14 million people are eligible for free health care through Medicaid or SCHIP.

Their unwillingness to seek insurance is not necessarily evidence of negligence on their part, but evidence that they see no value in enrolment.

All of this suggests what matters most (especially to low-income families) is access to care, not insurance.

One reason households forgo public health insurance is discontinuous coverage, explains Goodman:

Two-thirds of the children in the United States were eligible (based on family income) for Medicaid or SCHIP at some point from 1996 to 2000.

Yet public coverage is available only sporadically as family income rises and falls, leading to significant discontinuities in coverage.

Instead of attempting to enrol all the uninsured in state insurance programmes, a better strategy is income support. Under this approach, the state offers a subsidy to be applied to private insurance that adjusts with fluctuations in family income, says Goodman.

Source: John C. Goodman, A Plan for Real Health Reform, National Center for Policy Analysis/Heartland Institute, May 1, 2008; based upon: John C. Goodman, Michael Bond, Devon M. Herrick and Pamela Villarreal, The Handbook on State Health Care Reform, National Center for Policy Analysis, 2007.

For text: http://www.heartland.org/Article.cfm?artId=23041

For RAND study: http://content.nejm.org/cgi/content/full/354/11/1147

For more on Health Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=16

FMF Policy Bulletin/ 08 April 2008