Wednesday, July 18, 2007

"Government Subsidies That halve Premiums Would Cut Number of Uninsured by 3%"--No Surprise There But it Was the Wrong Question

That's the headline on a story regarding a Rand study that says giving people subsidies won't do much to decrease the number of those uninsured.

But here's the problem with that study: Paying for half the cost of health insurance that averages more than $11,000 for a family in the U.S. still makes health insurance prohibitively expensive for all but the well off.

As I posted yesterday, voluntary health plans that are successful, like employer plans, Medicare Part D, and Medicare Part B pay 75% of the cost of coverage bringing the cost into line with what people can afford and get great participation.

Asking people if they can afford half of something like $11,000 was a dumb premise for a study in the first place.

All the folks at Rand needed to do was to go look at their own company health plan. My bet is that Rand pays about 75% of the costs for its employees and has more than 75% of its workers enrolled--and probably 95% of its workers that don't have coverage through a spouse.


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