Monday, October 13, 2008

Most of The Uninsured Can Afford Health Insurance

Obama would mandate healtcare coverage using the stick approach. Unnecessarily covering people who don't want to be covered and increasing the cost to taxpayers by establishing another inefficient bureaucracy like Medicare and Medicade.

McCain would provide you with an carrot, a $5000 tax credit, IF you choose to buy insurance.

Here is the research behind the affordability of the uninsured.

The authors first look at what people can "afford," based on whether household income is above or below the federal poverty line (or some multiple of the poverty line), adjusting reported income for differences between insured and uninsured adults attributable to employer premium payments for health insurance. They find that the insurance-adjusted poverty rate for adults aged 25-64 in 2000 was 10.5 percent; on that basis, health insurance is unaffordable for 10.5 percent of adults aged 25-64. For the whole sample, using the poverty line as a benchmark, 71 percent of the currently uninsured population could afford health insurance coverage. Increasing the definition of affordability to family income exceeding three times the poverty threshold, the proportion of "uninsured afforders" declines to 28 percent.

Bundorf and Pauly also present a number of estimates defining affordability thresholds according to the proportion of individuals with similar characteristics who purchase insurance. Using a definition of health insurance as affordable if the majority of people in similar circumstances purchase coverage, the authors find that health coverage was affordable to between 59 and 66 percent of the insured, depending on the characteristics used to define individuals as similar. Using the threshold that 80 percent of similar households purchase insurance, they find that around 25 percent of the uninsured could afford coverage based on peer comparisons.

Thus, the researchers conclude that the affordability of health insurance, measured in various ways, is not a particularly accurate predictor of whether a person will obtain coverage. It is certainly not the only explanation of observed patterns of insurance coverage. 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. This provides a clearer framework for policy decisions and for prioritizing where public assistance is required.

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