People who can buy insurance but don’t

November 10th, 2008 | by Brian Schwartz |

This video at Reason.tv suggests that many people who lack health insurance can afford it, but choose not to.


From Reason.tv:

“Of people currently classified as uninsured, a conservative estimate says about 45 percent of them would be able to get health insurance right now if they wanted it,” says economist Glen Whitman. That estimate comes from a study headed by a Johns Hopkins University researcher, which separates those who could get insurance into one of two categories: Those who earn enough money to buy it, and those who qualify for existing government programs.

References to papers mentioned in video:

The Uninsured And The Affordability Of Health Insurance Coverage, Health Affairs, 26, no. 1 (2007)

Twenty-five percent [of the uninsured] are eligible for public coverage… and 20 percent can afford coverage.

Is Health Insurance Affordable to the Uninsured?, National Bureau of Economic Research:

The broad picture that emerges from the authors’ tests is that between 25 percent and 75 percent of people who do not purchase coverage could afford to do so.

Bureau of Labor Statistics Consumer Expenditure Survey. (2006 figures, $40,000 -$49,999.)

Cost of non-group insurance premiums (from America’s Health Insurance Plans)

  • Individual plans, Age 25-29: $1534. Age 30-34: $1877
  • Family plans:
    Age 25-29 (2.7 people/family): $3540.
    Age 30-34 (3.2 per family): $4309

Characteristics of the Uninsured in Colorado - Lewin Report, 2007. (local copy)

  • almost 35% of the uninsured have a family income exceeding $40,000.
  • 25% of the uninsured have a family income exceeding $50,000.
  • 40% of all uninsured Coloradans are between 19 and 34 years old.

Median Household Income (2006):

See also here.

(I am not implying that government should make purchasing medical insurance mandatory. This is impractical and immoral. Nor am I saying nothing can be done to make insurance more affordable.  There’s a lot to do. )

tags: , ,
  • Yeah, it's not like looking at the menu at McDonald's, pumping gas, or buying steel from Hank Reardon. Maybe people should stop making that association.
  • The problem with the insurance premium quotes above is that they ignore medical underwriting. At least in the states that have it, those rates can be significantly raised depending on the pre-existing conditions of the applicant. And in many cases it takes what appears affordable on the surface to something that is not.

    Good point. I wasn't saying that anyone in a certain age range who earns some amount of money can necessarily afford insurance. Certainly pre-existing conditions are an issue. About one in ten people age 25-34 are denied coverage, for medical reasons, I assume (source).

    Anyway, one benefit of eliminating the tax exemption for employer-provided insurance is that more people would get non-employer-based insurance when they are young and healthy. Many of these plans have a guaranteed renewable provision (even before states mandated it). So this would mitigate the pre-existing condition problem.
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