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The Real Number of Uninsured Americans

It's nowhere near 50 million Americans

10:45 AM, Dec 29, 2010 • By JEFFREY H. ANDERSON
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Across the health care debate, supporters of Obamacare have tried to inflate the number of uninsured, and too often they have gotten away with it. Yesterday, for instance, a Huffington Post banner headline read, “Number of Uninsured Americans Soars to Over 50 Million.” But this claim cannot withstand examination. 

The Real Number of Uninsured Americans

The Huffington Post story relies on a “sobering new report” from the decidedly pro-Obamacare Kaiser Foundation. The Kaiser Foundation report, in turn, bases its findings of 50 million uninsured Americans (under the age of 65) on the Current Population Survey’s Annual Social and Economic Supplement (CPS ASEC), published by the Census Bureau. Kaiser describes the CPS ASEC as “the primary source of annual health insurance coverage information in the United States” and as “the most frequently cited national survey on health insurance coverage.” 

The problem is that, as the Census admits within the pages of the CPS ASEC (on page 22), “Research shows health insurance coverage is underreported in the CPS ASEC for a variety of reasons.” This concern is serious enough that the report notes, “There are several ongoing projects aimed at improving the quality of health coverage data from the CPS ASEC.” On page 69, the Census elaborates on this over-counting of the number of uninsured, admitting that while almost all surveys” inflate the number of uninsured, its CPS ASEC report inflates that number by even more than most: 

Health insurance coverage is likely to be underreported on the Current Population Survey (CPS).  While underreporting affects most, if not all, surveys, underreporting of health insurance coverage appears to be a larger problem in the Annual Social and Economic Supplement (ASEC) than in other national surveys that ask about insurance.

The Census report also admits within its own pages that recognition of its inaccuracy led to “a research project to evaluate why CPS ASEC estimates of the number of people with Medicaid are lower than counts of the number of people enrolled in the program from CMS” — in other words, to evaluate why the CPS ASEC lists millions of Americans as being uninsured while the Centers for Medicare and Medicaid Services (CMS), which runs Medicaid and keeps the official tally of enrollees, says that these people are on Medicaid. During this project, “files from the Medicaid Statistical Information System (MSIS) were linked with the CPS ASEC files and the individual records were compared.”  The conclusion?  “A key finding indicating survey response error in the CPS ASEC was that 16.9 percent of people with an MSIS record indicating Medicaid coverage reported in the CPS ASEC that they were uninsured.” 

Any private citizen can do the math from there, which the Census has done as well: 16.9 percent of the 47.8 million people on Medicaid is 8.1 million. So more than 8 million of the 50 million “uninsured” are people who aren’t actually uninsured at all, but instead are on Medicaid.

That leaves us with approximately 42 million uninsured, according to the Census’s correction of its own survey figures (a correction that Kaiser doesn’t make). Of these, according to the same report, 10 million aren’t citizens. That leaves us with 32 million uninsured Americans — a far cry from 50 million, but apparently close enough for government (or Kaiser) work. 

Are these 32 million uninsured Americans languishing in Dickensian squalor, as the advocates of Obamacare would lead us to believe?  Far from it. The Census states (in Table 9 of the CPS ASEC report) that approximately 11 million of those who are uninsured live in households that make over $75,000, while another 9 million (giving us 20 million total) live in households that make more than what the same report shows (in Figure 1, on p. 6) to be the median American household income of $49,777 annually. 

Are these 32 million — either because they cannot afford insurance, or because they choose not to buy insurance — going without care?  Hardly. Some of these 32 million (such as those who make over $75,000) pay for at least some portion of their health care out of pocket.  Moreover, as Kaiser writes, $57 billion (pre-Obamacare) is provided annually for “uncompensated care,” through the federal government (45 percent), state governments (30 percent), and charitable contributions (25 percent). As a result, “Hospitals, community centers, and physicians provide care to the uninsured.” 

Perhaps this is why, as a recent Gallup poll shows, nearly 60 percent of those who are uninsured and make between $30,000 and $74,999 rate their health care as “excellent” or “good” — despite not having health insurance.

Would Obamacare provide for the uninsured in a more inexpensive manner? Not according to the Medicare chief actuary, who says that Obamacare would raise nationwide health costs by over $300 billion through 2019 in relation to what those costs would be without Obamacare. 

A recent lead piece on page-1 of the Washington Postabout which Bill Kristol wrote — begs the question of whether Obamacare can cover people at any cost, having so far succeeded in covering only 2 percent of those it was projected to be able to cover by the end of this year through its federally controlled high-risk pools. Despite the fact that that program has thus far covered only 8,000 out of a projected 375,000, the Post writes that “claims for medical care covered by the ‘high-risk pools’ are proving very costly, and it is an open question whether the $5 billion allotted by Congress to start up the plans will be sufficient.”  Even if there were anywhere near 50 million uninsured, Obamacare wouldn’t remotely be the answer.

The Kaiser report, relying on the Census’s CPS ASEC report, also claims that the number of uninsured rose by almost 6 million from 2007 to 2009 (both years are pre-Obamacare, which was passed in March of 2010). But another Census report declares that “The percentage of people without health insurance in 2009 was not statistically different from 2007.” In fact, the report says, “The number of people with health insurance increased to 255.1 million in 2009 — up from 253.4 million in 2007.”

Regardless, even the Census’s CPS ASEC report shows that the number of uninsured Americans is 32 million (not 50 million). It also shows that almost half of these 32 million make more money than most Americans. And Gallup shows that nearly 20 million of these 32 million say they are already happy with their health care. That leaves something on the order of 12 million Americans who are uninsured and unhappy with their health care — less than 5 percent of the citizenry. 

The easiest way to help these less-than-5 percent of Americans is to fix the unfairness in the federal tax code, which forces most people who don’t get health insurance through their employer to try to buy it with post-tax dollars, while the vast majority of Americans buy it with pre-tax dollars (usually through their employer). My small bill proposal estimates that this approach, along with other commonsense provisions, could reduce the number of uninsured Americans by about 10 million people. The small bill would also reduce health costs — without exploding federal spending and deficits, jeopardizing the preexisting health insurance of millions, or compromising Americans’ liberty.

The tale that nearly 50 million Americans are uninsured and lack sufficient health care actually contains two falsehoods in one. In truth, there aren’t anywhere near 50 million uninsured Americans, and — by their own assessment — most uninsured Americans don’t lack sufficient health care. Claims to the contrary may be useful to those who support a government takeover of what will soon be one-fifth of our economy. But they don’t withstand examination any better than do the government-centric solutions that they are designed to advance.

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