Viewing the uninsured rate through foggy lenses

Subscribe to xpostfactoid

Snapshots of the health insurance status of the U.S. population are blurry.

When you look at the CMS tally of Medicaid enrollment increase since the pandemic struck, it seems, simply, that the increase swamps most estimates of the number of people that lost employer-sponsored insurance. Other factors are at work, of course. But the one large number is considerably larger than the other large number.

But official Medicaid enrollment totals may not be an entirely reliable measure of how many people are actually covered by Medicaid, and know themselves as such -- particularly during this pandemic, when disenrollments have been paused since March 2020. State Medicaid agencies are, to varying extents, blind beasts.

I know a young man who, during a year of transition, lived in two states and worked at three jobs, with a period of unemployment. At different points in the year he applied for Medicaid in two (blue) states and received rejection notices. From both of those states, months later (and months apart), while insured through a new employer, he was sent managed Medicaid membership cards and informed that he'd be enrolled since shortly after his application was completed.  In both states, it took some doing and some time to get himself disenrolled.

Uninsurance goes upscale: The Census's Health Insurance Coverage Update for 2018

Yesterday the Census Bureau* released its health insurance estimates for 2018. The top line showed a rise in the uninsured population of 1.9 million, or 0.5% -- the first increase since the ACA's main programs launched.

Disturbingly, the number of uninsured children increased by 425,000, or 0.6%, raising children's uninsured rate to 5.5%. That spike would appear to be due mainly to a drop in Medicaid coverage, given that  Medicaid and CHIP coverage for children was down 1.2%; and the overall percentage of children with public health insurance dropped 0.8%, while the percentage of children with private health insurance ticked up 0.2%. There was also, however, a sharp spike in the uninsured rate among children in households with incomes over 400% of the Federal Poverty Level (FPL), from 1.9% in 2017 to 2.6% in 2018 -- accounting for almost half of the increase in uninsured children.

Folks at Georgetown University and the Center for Budget and Policy Priorities will probably dive  into the spike in uninsured children, as they have been doing for at least a year. Here I just want to throw some sidelights on the Census numbers generally.

1. Affluent uninsured population spikes. Notwithstanding a drop of 2 million  (0.7%) in Medicaid enrollment, the sharpest increases in the uninsured were at high incomes. At 300-399% FPL, the insured rate dropped a full percentage point, from 92.9% to 91.9%, and at over 400% FPL, the rate dropped 0.8%, from 97.3% to 96.6%. Together, these two income groups account for 55% of the population. Particularly striking, the number of uninsured at incomes over 300% FPL increased 23.8% (from 6.631 million in 2017 to 8.215 million in 2018).  The spike in uninsured children at high income levels seems congruent with this drop.

Should the U.S. ditch private insurance?

Subscribe to xpostfactoid via box at top right (requires only an email address; you'll get 2-3 emails per week on average)

Elizabeth Warren has gotten tight with Ady Barkan, a brave ALS patient and advocate for Medicare for All. In the July 30 debate, she told his tale:

The guy who has ALS, this isn’t this is somebody who has health insurance and dying. Every month he has about $9,000 in medical bills that his insurance company won’t cover. His wife Rachel is on the phone for hours and hours and hours begging the insurance company please cover what the doctors say he needs.

Barkan, in his turn, tweeted during the next night's debate: 

Every candidate on stage who doesn’t want to get rid of private insurance should have to explain what a company like Aetna adds to our health care system. How do they make patients’ lives better? #DemDebate

— Ady Barkan🔥🌹 (@AdyBarkan) August 1, 2019

Fair enough. Whether to preserve private insurance, and how to reform it if so, are the questions that divide Democratic candidates' approaches to healthcare reform, at least theoretically (what each of them would truly aim to accomplish via legislation introduced in 2021, and how they would balance their healthcare goals with other priorities, are questions they should be asked). 

In any case, let's look at the rap sheet against insurance companies -- and set it against their claims to add value to our healthcare system.

The raps

• Divided and conquered: All but uniquely among wealthy countries, the U.S. leaves private insurers to each separately negotiate payment rates with healthcare providers. The fragmented payer universe gives providers outsized bargaining leverage, particularly in areas with dominant hospital systems or provider shortages.  Accordingly, commercial insurers pay hospitals about 189% of Medicare rates, according to a Congressional Budget Office estimate, and 241% Medicare according to a more recent RAND study. Commercial rates for doctors are about 128% Medicare, according to MEDPAC. 

Herszenhorn misrepresents the fading public option

In his assessment of the still fluid-and-fuzzy Senate health care compromise, I believe that the estimable David Herszenhorn misrepresents the rationale for the public option (though perhaps capturing the rhetoric and emotion of many supporters):

Supporters of the public option want it to remove the profit motive as an obstacle to medical care, and also to menace the private insurance companies that they generally view as greedy and mean. At times, some lawmakers seemed to favor the public plan simply because private insurers hate the idea.

The point of the public option is not to punish or necessarily weaken the private insurance industry. A strong public option would aim its firepower at providers more than at insurers. That is, by tying repayment rates to Medicare rates, it would bring a wider swath of this country's patchwork of health care payments under the aegis of the Federal government.  In other words, it would move the U.S. health care market one step closer to monopsony, the sine qua non of universal health care in every country that offers it -- a market in which the government sets the prices (and coverage rules) for all health care services. That ultimately should improve the pricing power of private insurers competing against a public option; for all the industry's cries about "cost-shifting," the net result of increased government pressure on pricing is likelier to be more pricing power for all buyers.