November 24 2010
It should come as no surprise that when consumers have to pay more out-of-pocket for their health expenses that they opt to get fewer treatments. This is the finding of a new study from University of Pennsylvania scholar Jeffrey Kullgren which focused on people with high-deductible health plans:
In fact, nearly one-half of all families, from a variety of income levels, who were enrolled in high-deductible health plans (HDHPs) reported they didn't receive a recommended medical service in the past six months because of the cost. By comparison, an earlier study found that 20% of the general U.S. population had reported delaying or missing care in the past year...
Researchers received completed surveys from 434 HDHP enrollees and found lower-income families -- those living at up to 300% of the federal poverty level -- were significantly more likely than higher-income families to report having delayed care in the previous six months for an adult because of cost (51% vs. 35%; P=0.02); and also more likely to delay care for a child because of the high cost (24% vs 14%; P=0.01).
Lower-income families also were more likely than higher-income families to report delaying or skipping an operation or procedure because of cost (20% vs 6%; P=0.003).
I'm not going to argue simply that this is the way the world works and low-income people have to make decisions about how to allocate their limited resources. I do believe in individual responsibility, but that doesn't require me to be hard-hearted. It's possible that some families are deciding between health treatments and other basics like groceries or rent.
So what's the answer here, when health care is simply unaffordable for some people? The new health care law deals with this problem through multiple avenues. First, the new law outlaws insurance that doesn't meet minimum essential requirements (so high deductible plans are no longer an option). And indeed, this would decrease the cost per treatment for the individual (by forcing insurers to foot the bill), but it will surely also increase premium costs. To address the rising insurance premium costs that come with such mandates, President Obama wants to give more Americans subsidized coverage in state-wide exchanges.
We all know about the many unintended consequences of this massive government remake of the health care system (see my recent policy paper for starters, and this paper by Nicole Kurokawa). Opposing this health care law, however, doesn't mean that we return to the status quo and leave those who can't afford care to fend for themselves. There are other ways to address those who are truly casualties of our health care system, and they should be the target of federal assistance (see here for further discussion of how ObamaCare hurts poor people and here for suggestions on how to make health insurance more available to them).
But here's a better fix for low-income people: Let's turn them into people who can afford their own coverage.
The only way we beat poverty - in health care, in education, in the inner city, in every area - is to convert impoverished people to self-sufficient people. Moving more people onto government assistance doesn't move them up the social ladder. Empowering them with more disposable income and more affordable prices... Now, that would.
But how do we get to those better incomes and affordable prices? Only with a strong economy. ObamaCare and other cost-sharing policies from the Obama Administration don't move any Americans forward. They stall us all by spreading the wealth around. Have we forgotten that the wealth has to be created before it is spread? America would do better to maximize the productivity of all its citizens instead of telling low earners (in action, not in words) that they are unfit to earn their own health coverage.