News of the Day ... In Perspective3/18/2007
Uninsured subsidizing the insured
Many politicians and left-leaning advocacy groups such as Families USA blame the uninsured for higher insurance premiums. “Free riders” impose “hidden taxes,” they say. And once everyone is insured, fewer people will use expensive options such as emergency rooms for their primary care—or so the argument goes.
Bullying the uninsured to make them buy insurance will not solve the problem, writes John Graham, director of health care studies at the Pacific Research Institute (Chicago Tribune 3/5/07).
Graham concludes that mandatory insurance will simply move the currently uninsured to a higher spending baseline.
The real “hidden tax” is levied by the insured on their fellow insured, Graham writes. Overinsurance is the real cause of out-of-control costs.
Bolstering this conclusion is the result of a recent study that showed a 10 percent decrease in first-time emergency room visits, and a 25 percent decrease in repeat visits, mostly for non-severe conditions, in patients with a high-deductible health plan. Hospitalizations were also both less frequent and shorter among patients with high deductibles (Medical News Today 3/14/07).
The study analyzed ER visits by 8,724 individuals in the year before and after their employer mandated a switch from a traditional HMO plan to a high-deductible plan, compared with 59,557 contemporaneous controls who remained in the traditional plan (Wharam JF, JAMA 2007;297:1093-1102).