I was without health insurance for more than one-third of my life. The first third, mostly. Growing up my father was self-employed. We never had health insurance. Back then a trip to the doctor’s office was easily paid for in cash. The local clinic offered cash prices that were not much different than the prices charged to insurance companies. A relative told me about the birth of her daughters at the local hospital. They too were paid in cash.
With the end of the covid emergency millions of Americans enrolled in Medicaid found they were no longer eligible. Medicaid eligibility fluctuates over time for many families. Medicaid is a patchwork of 50 state programs with eligibility that varies by age and income. Pandemic-era protections against disenrollment began expiring in the Spring of 2023 with Medicaid coverage coming to an end for many Americans. An important question public health advocates have is what happened to people dropped from the federal-state health program?
Nearly a quarter of adults disenrolled from Medicaid in the past year say they are now uninsured, according to a survey released Friday that details how tens of millions of Americans struggled to retain coverage in the government insurance program for low-income people after pandemic-era protections began expiring last spring.
Oddly enough, nearly half of those dropped from Medicaid coverage (47%) were able to sign back up weeks or months later, according to a national survey. Another 28 percent of those dropped found other coverage, either through the Obamacare marketplace, work, the military or Medicare, for example. Twenty-three percent remained uninsured.
A question that Kaiser Health News spent too little time discussing was, what difference does Medicaid (or any health coverage) make? KHN said:
Seven in 10 adults who were disenrolled during the unwinding process say they became uninsured at least temporarily when they lost their Medicaid coverage.
Going without insurance even for a short period of time can lead people to delay seeking care and leave them at financial risk when they do.
Obamacare coverage also causes people to make similar decisions and puts them at similar risk. My Obamacare plan is sponsored through a local hospital system. I’m hesitant to use it out of fear it will be little more than a way to refer me to hospital services at prices far higher than found elsewhere. My deductible is about $9,000 before the health plan begins to pay.
What is the purpose of health insurance and why does it matter? If I knew that nothing bad would happen to me for the remainder of 2024, I would drop my Obamacare coverage and go bare. Ending the year with no health coverage, no unmet medical needs and no medical bills that exceed health insurance premiums is a big win, not a travesty. I have health coverage solely because I want someone to assume the risk of catastrophic medical bills that could sap my retirement funds. That’s all insurance is: a transfer of risk in return for the payment of a premium.
It’s not a $10,000 diagnosis that worries me (I already bear that risk with Obamacare). What worries me is the small risk of the hospital stay after a heart attack. Or the cancer scare treated with $1 million drugs. More likely it’s the uninsured motorist who hits my little car and sends me to the hospital for a week with months of rehab ahead of me. In the field of risk management an absolute risk is a function of the sum of all probable risks, amplified by the magnitude of the worst-case scenario. In all likelihood I won’t win the health insurance game and that’s a good thing. However, a worst-case scenario would bankrupt me at a time when I’m too old to recover financially. So, I have Obamacare.
How big was the Medicaid disenrollment?
Nationally, states have disenrolled about 20 million people from Medicaid in the past year, most of them for procedural reasons such as failure to submit required paperwork. That number is expected to grow, as states have a few more months to redetermine enrollees’ eligibility.
Among adults who had Medicaid prior to the start of the unwinding, 83% retained their coverage or reenrolled, while 8% found other insurance and 8% were uninsured.
It would be interesting to know more about the status of the 8 percent who remain uninsured. Most are probably healthy and able to pay for day-to-day care out of pocket. In health care 80 percent of medical spending is on 20 percent of the population. More than half of medical expenditures are on about 5 percent of the population. Thus, most people are healthy and most likely qualify for Obamacare subsidies if they want coverage.
Read more about the survey at Kaiser Family Foundation Health News
Thanks for your comments.
The last paragraph on those who remain uninsured took me back to the original designs of Obamacare.
Designers like Jon Gruber did not want to let that 8% stay uninsured. They were “healthy lives” that would lower the premiums (somewhat minutely, I suspect) for everyone else if they were forced to buy coverage. ‘
This notion is what led to the insurance mandate in the original ACA legislation.
Designers like Gruber also had what I will call an ethical complaint about the uninsured. He noted if they stayed uninsured and stayed healthy, they won the coverage bet and saved money.
But if they got seriously ill, they created unpaid hospital bills that eventually harmed all of us.
Sort of like “Heads I win, tails you lose.”
He might be right on this last point.
Was not Gruber also the guy who said he has no sympathy for people who complain about being over charged because they won the genetic lottery? Health status in middle age has a lot more to do with lifestyle than genetics. Also as an economist he should remember that cross subsidies like the ACA requires are inefficient. If you want to solve the free rider problem then make people save onto a Medi-Save account like Singapore.
I have read a fair amount about the Singapore health system, largely from Aaron Carroll.
Two quick points:
1. Medi-Save is very good for ambulatory care. It does not solve the financing of expensive hospital stays. For that, Singapore creates large public hospitals with old-fashioned taxes.
2. Medi-save is still a good idea, but I cannot see Americans voting it in. Singapore is a tiny country with law-abiding Asians. It has no cowboy culture.