Tuesday, May 06, 2014

Is health insurance worth the money? Would you do without it?

A rigorous study* of the effects of health reform in Massachusetts since its 2006 launch yielded powerful evidence that the state's expansion of access to health insurance improved health and reduced mortality, particularly among poorer citizens. Adrianna McIntyre summarizes the core finding:
Benjamin Sommers, Sharon Long, and Katherine Baicker estimate that overall mortality in Massachusetts declined 2.9 percent relative to control counties between 2007 and 2010; mortality amenable to health care declined 4.5 percent. This translates to one death prevented for every 830 people who gain insurance, and the effects were larger in counties with low income and low pre-reform insurance rates—the counties we would expect to be most favorably impacted by reform.
Health economists, as is their wont, have put  (tentative) price tags on lives saved.  The ever-humane Harold Pollack pegged the cost-per-life at $3.3 million, adding the essential caveat:

These calculations don’t consider other key benefits associated with insurance. Fewer people with diabetes will suffer nonfatal but awful complications such as blindness or limb amputation. Fewer sick people will incur crippling medical debts. In the Oregon experiment, health coverage was also associated with striking reductions in stress, depression, and self-assessed mental health.
Ideological ACA enemy James Cannon pegs the per-life cost somewhat higher, at $4 million, and then claims that "RomneyCare would have to give every person it saves an average of nearly 30 additional years of life to meet the World Health Organization’s criteria for cost-effectiveness." Cannon's (foregone) conclusion:
As an economist might put it, this means there are likely to be policies out there that could save a lot more lives than RomneyCare does per dollar spent.

Or as Sarah Palin might put it, even if RomneyCare saved as many lives as this study suggests, it still probably deserves to be death-paneled.
In response, Pollack's fellow blogger at The Incidental Economist, Bill Gardner, reiterates and elaborates Pollack's quick catalog of other benefits conferred by insurance, and then adds an important point with regard to equity and our society's prior choices. After pointing out that Cannon's ideological allies in office in red states blocked the ACA Medicaid expansion "but then did nothing else for the health of their uninsured"  -- as Cannon's flip Palinesque dismissal of Romneycare implicitly commits them to -- he demands:
is it just to worry about the cost of health insurance only when we are considering insuring the poor? 55% of the US population had employer-based health insurance in 2011. Because this benefit isn’t taxed, this meant that 55% received a large subsidy for their insurance, including many affluent people. (And I’m sure Michael Cannon hates this, probably more than I do!) If you oppose the expansion of Medicaid, you should also favor the taxation of employee health benefits. Otherwise, you are arguing that we can afford to subsidize the health insurance of the rich, but that it costs too much to do it for the poor.
I'd like to translate that challenge into personal terms. Would those who question the cost effectiveness of making health insurance affordable to all Americans be willing to go without it themselves? Re the 150 million of us enjoying employer-sponsored insurance: could the money cobbled together by our employers,  ourselves and the federal government (via tax break)** be better spent --say, on smoking prevention? Would most of us be willing to accept a bet that health insurance would not extend our life expectancy by 30 years, whether we're 21 or 64?

Or think of it this way. Let's say I'm 30 pounds overweight at spending $300 per month on health insurance. Maybe I should drop it and plwo $3600 into the world's most effective weight loss intervention. Or say my son's high school performance is looking marginal. Maybe a top-line tutoring program would improve his life prospects -- and so his long-term health -- more than the money I'm spending to keep him covered? No one traffics in such oddsmaking. We all regard maintaining access to the healthcare we may need as non-negotiable. That's why every other wealthy country has made access universal.

Those who don't like the ACA can fairly argue that there are better models for extending affordable health insurance to all. Conservative physician Pradheep Shanker argues that the Massachusetts study does not prove the efficacy Medicaid per se, and aligns himself with conservative healthcare scholars and writers who acknowledge that healthcare access should be extended to all. In that regard, he meets Gardner's ethical challenge. He suggests, fairly enough, that the Massachusetts study leaves open the question of best means:
Is expanding Medicaid the most efficient use of those dollars?  Are we better off moving those patients into the private market?  Are we better off moving to single payer?  Would a more patient-centric approach provide better or worse outcomes?
It's noteworthy, though, that there are almost no Republican elected officials who have proved willing to commit to actual legislation that would purport to "replace" the ACA with an alternative that could make a credible claim to extend health insurance to as many uninsured Americans as the ACA does. Senators Coburn, Burr and Hatch rolled out the outline of such a plan -- which looked a lot more like an opening bid to reform the ACA to conservative specs than actual replacement -- and their colleagues studiously ignored it. In fact Republican governors and state legislators can effectively repeal and replace the ACA on a state level, if they really want to extend coverage by more conservative means, via state waivers (effective in 2017) that create potential space to re-engineer virtually every core provision of the ACA.  There's no hint of any such plans that I'm aware of.

That abnegation suggests two levels to Gardner's challenge. Conservative health economists James Capretta and Douglas Holtz-Eakin have put out fairly complete ACA replacement blueprints. Given dictatorial powers, perhaps they would implement those plans. Conservative health wonks Avik Roy and Yevgeniy Feyman have acknowledged that repeal is no longer feasible and have more or less committed themselves to criticism and reform of the law. Their allies in office, however, have worked only to sabotage the ACA, never acknowledging that it will improve health and save lives, however inefficiently. To the extent that they acknowledge that the goal of affordable insurance is worth pursuing, they generally offer only Fauxbamacare, promising to maintain the bill's goodies without explaining how they'd pay for them.

The Massachusetts study suggests an ethical "do no harm" imperative for ACA critics: reform or fully replace the law if you will and can (as to the latter, they won't and can't), but stop the sabotage.

Of course, with some 12-15 million direct beneficiaries now on the rolls, political reality imposes the same imperative.

* Changes in Mortality After Massachusetts Health Care Reform, by Benjamin Sommers, Kate Baicker, and Sharon Long, Annals of Internal Medicine, May 2014

** Gardner plainly believes, as do most health economists across the ideological spectrum, that the employer tax exclusion for healthcare benefits as currently constructed is inefficient and inequitable. But limiting it, means-testing it, or equalizing it with tax breaks for those buying insurance in the individual market does not imply abstaining from use of federal resources to ensure affordable access to all.

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