Does Expanding Health Insurance Affect Health?

Ezra Klein describes me as “honest, thoughtful, and very, very wrong on health care issues” before going on to characterize an op-ed that Mike Tanner and I authored for the L.A. Times as “violently, even surprisingly, misleading… [and] simply and blatantly misleading.”  Well.

Klein cites two claims Tanner and I make in that op-ed:

  1. [I]n reviewing all the academic literature on the subject, Helen Levy of the University of Michigan’s Economic Research Initiative on the Uninsured, and David Meltzer of the University of Chicago, were unable to establish a “causal relationship” between health insurance and better health.
  2. Believe it or not, there is “no evidence,” Levy and Meltzer wrote, that expanding insurance coverage is a cost-effective way to promote health.

Klein argues that with these two claims, Tanner and I are “misrepresenting [Levy and Meltzer’s] conclusions.”

Taking the second claim first, here is the full quote from Levy and Meltzer:

It is clear that expanding health insurance is not the only way to improve health… Policies could also be aimed at factors that may fundamentally contribute to poor health, such as poverty and low levels of education. There is no evidence at this time that money aimed at improving health would be better spent on expanding insurance coverage than on any of these other possibilities.

Thus our claim that there is no evidence that expanding coverage is a cost-effective way to improve health does not rest on a conclusion that expanding coverage produces no health improvements.  It merely states that whatever health gains expanding coverage achieves could plausibly be achieved at a lower cost by other interventions.

Regarding the first claim – that Levy and Meltzer were unable to conclude that the literature establishes a “causal relationship” between health insurance and better health – Klein counters by quoting Levy and Meltzer’s discussion of the literature:

Taken as a whole, these high-quality studies of the health effects of health insurance strongly suggest that policies to expand insurance can also promote health.

Elsewhere, Meltzer describes his work and conclusions:

Our work doesn’t argue that health insurance does not impact health, only that much of the evidence that claims to show that is less conclusive than one would like…

There are probably a thousand studies in the literature that show the correlation [between health insurance and better health], but less than a dozen really have a strategy that gets around interpreting this relationship as more than just being a correlation… 

The studies that have been done of so-called natural experiments or policy evaluations have in general suggested there are health benefits to expansions of insurance. The studies do suggest a connection. But the point is there are relatively few of them. They’ve looked at these expansions in relatively narrow contexts. A lot of them are focused around kids. Nevertheless, what we’ve got does seem to suggest that health insurance makes a difference; that it does improve health…

Do I really believe in the end that we’ll discover that health insurance will improve health? I do believe that, but it’s a belief. And I’m quite confident that beliefs won’t be the way to identify the perfect health insurance policy.  [Emphasis added.]

In sum, there are a lot of studies that purport to show that having health insurance improves health, but in fact show no such thing.  A handful of well-designed studies that focus on specific populations (children, the elderly, infants, people with HIV) do suggest a causal relationship between coverage expansions and improved health.  As Klein notes, one well-designed study suggests no causal relationship.  Levy and Meltzer do not dismiss that study; they merely note that it points in the opposite direction.  Finally, the literature is still in its infancy.

Note the language Levy and Meltzer use.  The literature suggests a causal relationship.  Expanding coverage can improve health.  This is the sort of language used by careful social scientists who do not want to make claims that go beyond the available evidence.  Because the literature so far does not establish a causal relationship, Levy and Meltzer stop short of concluding that it does.  Meltzer himself candidly admits that his belief that expanding health insurance will improve health is just that: a belief based on what little evidence is available – not an established fact.

For what it’s worth, I share the belief that policies that expand coverage will improve the health of some people.  But I also believe that many such policies – including those that would expand coverage to everyone willy-nilly – would also reduce health outcomes for many people.  (Proponents of universal coverage love to ignore those unintended consequences.)

Our claim that Levy and Meltzer “were unable to establish a ‘causal relationship’ between health insurance and better health” was, of course, a simplification of a very complex picture.  But it was also a reasonable simplification given that this was a 650-word oped, and particularly since our topic was universal coverage – i.e., expanding coverage to the entire population, where there is even less evidence to establish a causal relationship between health insurance and health than there is for discrete groups.  If Klein can suggest a better simplification in as many words – and with his talents, he probably can – we should be glad to hear it. 

However, we suspect that Klein’s negative reaction (as well as those we received from others) was motivated not by our failure to convey certain details about Levy and Meltzer’s research, but by our success at conveying its main thrust: that there is little evidence that expanding coverage improves health, and zero evidence that it is a cost-effective way of doing so.  That is a fairly powerful argument against running into the arms of a Mitt Romney or a Hillary Clinton or an Arnold Schwarzenegger or a John Edwards or an Ezra Klein who argues that the government should guarantee universal coverage.

It is noteworthy that although Klein cites both claims as “misrepresenting [Levy and Meltzer’s] conclusions,” he only attacks the first.  Yet the second is much more clear-cut and probably more damning to the cause of universal coverage.