New Uninsured Estimate, Same Old Story

Today, the Census Bureau reported that in 2005 the number of Americans without health insurance inched up yet again.  This annual ritual, repeated every August, gets old after a while. 

The Official Uninsured Estimate – now 46.6 million residents – comes from a survey that is not designed to measure insurance coverage.  The Official Uninsured Estimate includes people who are covered by Medicaid, who lack coverage today but will regain it tomorrow, and who make over $50,000 per year.  The Congressional Budget Office reports [.pdf] that the number of chronically uninsured (who lack coverage for a year or more) is more like 20-30 million – and still many of them are covered by Medicaid.

Part of this ritual is that Medicaid wins plaudits for “picking up the slack” when employment-based coverage falls.  Yet Medicaid encourages employers not to offer coverage, encourages workers to avoid private coverage, and makes private coverage more expensive for both employers and workers.  Medicaid doesn’t just catch people who fall off the economic ladder – it shakes the ladder.

Just about the only useful aspect of The Official Uninsured Estimate is the trend it displays over time.  When compared to the trend in the poverty rate (also released today), a stark contrast emerges.

  • Ten years ago, Congress reformed the welfare system.  It stopped the practice of just throwing more money at the problem of poverty.  What happened?  Poverty fell and remained lower in 2005 than at any point in the 17 years leading up to welfare reform. 
  • But Congress kept throwing more money at health care by expanding government programs (e.g., SCHIP).  The result?  Unlike the poverty rate, The Official Uninsured Estimate continues its steady climb.

Maybe we should stop throwing money at the problem?