Daily News Updates - Health Insurance News

The Real Problem With Covering the ‘Uninsured’, Pt.1 – The simple baseline.

Our nation is on the precipice of sweeping changes in our health insurance/care system that could dramatically change our way of life. But the focus has been deflected away from the driving forces that will actually determine how. Let’s start by explaining the conventional estimates of covering the 46 million Americans without health insurance. The common baseline is taken from the estimated 2008 personal healthcare costs. They are estimated at $2 trillion. Next, consider that the 46 million without health insurance that need to be covered is about 17% of our total population.

The rule-of-thumb is that those without health insurance are only costing about half as much as those who have health insurance. So let’s cut their portion in half: 17% / 2 = 8.5%. Pseudo-justification is now applied here that the average age of those without health insurance is younger then the whole. The simple logic is that the young are uninsured because they don’t have the need for as much health care. So let’s knock a couple more percentage points off – say 2%: 8.5% - 2 % = 6.5%.

Now 6.5% of the whole $2 trillion = $130 billion to provide health insurance/care to the ~46 million Americans who have none now.

Can we trust this very simple formula with the complexity of the reality that must exist? The answer is ‘yes’, according to a publication on the Health Affairs Web site from researchers and co-authors: Jack Hadley of George Mason University and John Holahan of the Urban Institute. The report provides a very detailed estimate of providing affordable health insurance/care to all of the uninsured Americans, arriving at a $122.6 billion total.

Continued…