Tuesday, July 17, 2007

The Price is Right (Not)

Bob's pointed out that insurer's profits really have little impact on premiums (indeed, cutting out a carrier's profit altogether does little to affect the final rates). And Mike's pointed out that health insurance is expensive because health care is expensive. One might then argue that, if the cost of health care declined, the cost of health insurance might, as well.
Maybe so, but it doesn't matter.
Why not, you may ask?
Turns out, there are a lot of folks who really don't care how much health insurance (or health care) costs, they ain't buyin'. Need proof? Here ya go:
That's pretty hardcore, and seems to me to put a whole new light on the nature of the "health insurance crisis." After all, is it really a crisis when 97% of the folks affected by it don't care?
And then there's the whole issue of gummint subsidies; these are touted as a way to make insurance premiums more affordable. But according to that same study, "subsidies that cut health insurance premium prices in half for people without insurance would reduce the number of uninsured Americans by just 3 percent."
That's interesting, isn't it? That "3%" keeps cropping up. In fact, it's a number that could easily reflect the actual margin of error in the study itself, which resulted from a survey of some 19,000 "new individual health care policy subscribers from January 1997 through the fall of 2001."
A Rand spokescritter, Susan Marquis, opined that "a federal requirement that all people have insurance may be the only way to achieve such a goal." That's a great idea [ed: um, no, it's not], but hardly practical: what about folks who want insurance, but don't qualify (admittedly, this is a very small subset)? Who sets the policy requirements? How does one enforce such a law, absent an actual government-run program (still dubious? Then explain to me why I need to buy uninsured motorists coverage)?
Okay, Prof, what about making policies more attractive?
I'll let Ms Maquis take that one: "(C)utting by 20% the amount of the annual deductible, which is what policyholders pay before benefits begin, would increase the likelihood of uninsured purchasing the policy by less than half a percent."
Back to the ol' drawing board.
The article concludes with this little tidbit: "Researchers concluded that newer types of individual plans with very high deductibles may be attractive to healthy people, but are unlikely to help reduce the total number of people without health insurance."
Really? Based on what, exactly? The release offers no substantiation for this silliness, as if it's just, well, obvious. But of course it's not, and goes against other studies which show just the opposite. Those other studies were not without flaws either, of course, but at least offered some evidence. The Rand folks just toss it out there for consumption, with no critical analysis or numbers.
Seems sloppy to me.
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