Category: Brief Analyses

Policy analysts and health care advocates often lament the plight of those Americans who lack health insurance. Yet most overlook the reasons why people do not have health insurance. If income were the only determinant, a simple income-based subsidy might alleviate the problem. Further, if all people valued health insurance equally, those families who qualify for public programs like Medicaid would enroll if they could not afford insurance. However, the matter is far more complex, as can be seen by examining five myths about health insurance in the United States.

According to the U.S. Census Bureau, 4.8 million of the 19.6 million Texas residents – about one in every four – are not covered by health insurance. Moreover, the proportion of uninsured has changed little in the past 10 years. However, in many cases the uninsured are uninsured by choice. And lacking health insurance does not mean lacking health care in Texas.

South Africa is mired in a health crisis as the rate of HIV infection reaches 22 percent of adults, including more than one in five pregnant women. The crisis is expensive. Drug treatment costs for AIDS range from $15,000 to $20,000 per year in the U. S., while per capita income in South Africa is only $6,800.

The Internet is the right tool at the right time to allow Americans to manage their own health care. It is changing the entire health care environment for physicians, insurers and patients. The Internet offers the possibility of one-stop shopping – enabling consumers to compare and price health plans, choose their doctors, apply for insurance coverage, check on the status of claims submitted, and pay premiums online.

In the history of social thought, advocates of a more equal distribution of income have made many arguments to support their cause. Egalitarians are now advancing a new argument: inequality of income leads to poorer health.

The Medical Savings Account (MSA) pilot program expires at the end of this year unless Congress acts soon to extend it.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) allowed small employers and the self-employed to set up a tax-favored savings account to pay for routine medical expenses, provided they also have an insurance plan that meets some very specific requirements.

While managed care was rather successful at holding down health care inflation in the 1990s, it did so at the price of growing dissatisfaction among workers, their doctors and ultimately politicians. The various proposals in Congress for a "Patient Bill of Rights" are an indication of this dissatisfaction. So too are the dozens of new "anti-managed care" state laws.

Some Americans faced with the rising costs of prescription drugs have begun looking longingly at Canada, where prescription drugs appear to cost less than in the United States. Some seniors are taking bus trips from New York and New England to Quebec to buy cheaper drugs.

The growth of the Internet and the vast amount of information it makes available are dramatically changing health care and medicine. As many as 100 million people in the United States now have access to the Internet, and that number is expected to grow by 50 percent over the next few years. Health information is some of the most popular content on the Internet.

Medical Savings Accounts (MSAs) are usually associated with large deductibles. For example, under a federal pilot program, in order for employers and their employees to make tax-free deposits to MSA accounts, patients must incur $1,550 or more in expenses before the insurance kicks in. All the expenses below the deductible are to be paid from the MSA or directly out of pocket. Once the deductible is satisfied, the insurance acts like any other health plan.

Medical Savings Accounts (MSAs) give patients direct ownership of and control over a portion of their health care dollars. They have two main advantages. First, when people spend their own health care dollars, they become more careful and prudent consumers of care than when they spend other people's dollars. The result is lower health care costs and better value for the money spent. Second, when patients pay the bills, doctors and other providers are more likely to act as the patients' agents rather than as agents of a third-party payer. The result is care that better meets the patients' needs.

President Clinton and some on Capitol Hill are proposing a costly prescription drug benefit for the elderly that could create huge new burdens for taxpayers. Fortunately, there is a way to solve the problem without costing taxpayers a single dime.

About 65 percent of the people on Medicare also have some kind of prescription drug coverage. Some obtain it from a former employer. Some buy private supplemental (Medigap) insurance. Others are covered through Medicaid. But about 12 million have no coverage. Sens. Olympia Snowe (R-Maine) and Ron Wyden (D-Ore.) have proposed a new federal program, the Seniors Prescription Insurance Coverage Equity (SPICE) Act, to subsidize prescription drugs for all Medicare beneficiaries.