Patient Power

Underinsured?

The Commonwealth Fund has released a new study claiming that

the number of underinsured U.S. adults—that is, people who have health coverage that does not adequately protect them from high medical expenses—has risen dramatically. …As of 2007, there were an estimated 25 million underinsured adults in the United States, up 60 percent from 2003

But as John Goodman at the National Center for Policy Analysis points out,

After reeling from the sheer size of that number, my first question was: How many Americans are overinsured?…. Overinsured?…. Yes, overinsured. Since CWF claims that the primary reason for underinsurance is high deductibles and since the primary reason for a high deductible is to reduce the degree of overinsurance, one can’t adequately study one problem without studying the other.

Examples of overinsurance are: a male, or a female past menopause, paying for maternity coverage; or someone paying $200 to insure for primary care that can be purchased out-of-pocket for $100; or anyone at anytime paying more than 50 cents to transfer a dollar’s worth of risk to an insurer. Mandated benefits are a principal cause of overinsurance–forcing people, say, to purchase coverage for in vitro fertilization or acupuncture or natureopathy or dozens of other services they never intend to use. In fact, several studies, including one by yours truly, estimate that as many as one in every four uninsured persons has been priced out of the market by these cost-increasing regulations.

So to get to the bottom of things, I went to the CWF Web site, entered “overinsurance” into their search engine, and guess what?…. CWF has never heard of the term!…. That’s right…. The word “overinsurance” is not to be found.

This brings us to another concept which also seems to escape the CWF search engine: individual self-insurance. The alternative to third-party insurance is self-insurance. Instead of giving all their health dollars to, say, Blue Cross, people can reduce their levels of coverage and put the premium savings in a Health Savings Account (HSA) or (figuratively speaking) a Health Reimbursement Arrangement (HRA) or a bank account. Not only does CWF not seem to grasp this concept, in their survey they didn’t even bother to ask the “underinsured” if they self-insured through an HSA, HRA or some other account…. But, hey, not everybody shares my curiosity.

A Google search at Commonwealthfund.org does return one hit for “over-insurance,” but the linked PDF did not have the term.  I found nothing for “excess insurance,” and one hit for “too much insurance,” but that was merely describing a point of view.

None Found