The Cost of Health Insurance Expansions

As the reform law’s attempt to expand via health insurance exchanges slowly implodes and as states begin to realize the true cost of the Medicaid expansions they undertook, the usual crew of blinkered defenders of the ACA is ramping up efforts to portray it as a wonderful benefit to the populace.  A recent example is a commentary in the New England Journal of Medicine which purports to marshall evidence on the beneficial effect of health insurance on health.   (NEJM Commentary)   Basically they claim that the evidence suggests that health insurance improves health, but look at their summary table and you will see that the evidence does no such thing.  The only apparent improvement is in self-reported health, which frankly has little to do with actual health or health behaviors.  Most studies find no benefit in regard to prevalence or treatment of chronic diseases and I am not aware of a single study which indicates that improved health behaviors are tied to insurance.  Health behaviors should be a major focus because those behaviors are a large part of what leads to people’s need for health care.

Since the authors really have to stretch to find any support for the idea that actual health is better for people who have health insurance, which is a complicated analysis in any event, they focus initially on the reduction in financial stress that comes from insurance coverage.  I find it ironic that the proponents of expanding health insurance coverage often note the reduced financial stress that comes from having health insurance.  For people getting free gold-plated Medicaid coverage that may be true, but partly because of the perceived inadequacy of Medicaid reimbursement to providers, they jack up prices to private payers, which has led to the prevalence of high-deductible, high cost-sharing plans for most workers and their families.  This causes a great deal more financial stress for them.  And of course the authors totally ignore the national and state debt and tax burdens which increasingly are the result of health care spending.  It doesn’t reduce taxpayers’ stress to have to pay for all this “free” health care.

I agree that it is a good thing for people to have access to necessary health care.  I don’t agree that our current third-party payer system is the best way, or even a good way, to create that access.  And I don’t for a second accept the slanted view of the impact of health insurance expansions on the health of those who newly gain coverage.  There is no evidence that getting coverage does anything to improve health behaviors, in fact, in the case of Medicaid, it almost certainly reinforces health irresponsibility, since people get free health care no matter if they smoke, use drugs, drink too much, eat poorly or fail to exercise.  The current system will ultimately collapse of unaffordability and needs to be replaced sooner rather than later with one that puts financial accountability on the individual for his or her health choices.