Premium subsidies are not the answer
RAND Study Finds Health Insurance Subsidies Won’t Significantly Cut Number of Uninsured
RAND
July 16, 2007
Government subsidies that cut health insurance premium prices in half for people without insurance would reduce the number of uninsured Americans by just 3 percent, according to a RAND Corporation study issued today.
The study by the nonprofit research organization contradicts suggestions by some that large numbers of people without health insurance would sign up for coverage if government provided subsidies or tax credits to reduce the cost of health insurance.
“One implication of our findings is that if you really do want to get to universal health insurance coverage, voluntary solutions that rely on financial incentives aren’t going to get you there,” said M. Susan Marquis, senior economist with RAND and one of the study’s authors. “Government is probably going to have to mandate it.”
http://www.rand.org/news/press.07/07.16.html
Comment:
By Don McCanne, MD
Amazing. Using government subsidies to cut health insurance premiums in half would reduce the numbers of uninsured by only 3 percent if participation were voluntary. The initial experience in Massachusetts also indicates that mandating participation, even with government subsidies and penalties for non-compliance, also fails to achieve universal health insurance coverage.
Nothing short of making coverage automatic and permanent for everyone will work. If we do that then why should we create more complex and wasteful administrative inefficiencies in an attempt to make individual premiums affordable by collecting taxes and then redistributing them in an equitable manner based on the individual’s ability to pay the premiums? Equity is already established through the tax system. It would be much more efficient to merely transfer the tax revenues to a universal insurance pool that would pay out health care costs directly.
The only reason to create a program of government subsidies of premiums would be to perpetuate the role of private insurers. They sure haven’t taken care of us considering all of their waste of our premium dollars and their unwanted intrusions into our health care. Why should we adopt policies merely to take care of them when we would fare so much better with our own national health insurance program?
The private insurers have had their day. Now it’s our turn.