The Uninsured

The big news of the week was the Census Bureau releasing its estimates of the number of people who were uninsured last year, now totaling 47 million, up by 2.2 million from the year before.

The new numbers will certainly add fuel to the debate over the State Children’s Health Insurance Program, especially with the Census Bureau showing that the number of children without health insurance increased by 700,000 — all attributable to a drop in private coverage.

There is much information in the new report, and we could argue about the questionable quality of the data, about the fact that nearly half of the uninsured are without coverage for four months or less, about the increasing number of higher-income people without insurance, and the large number of illegal immigrants who contribute to the rise.

But the fact is that trends are important in policy and political debates, and they reflect a growing insecurity about health insurance across the country. As a result, health care and the uninsured will continue to be a focus of the debate this fall and in the 2008 elections.

The most noticeable drop in insurance coverage overall was among those with job-based insurance, down to 59.7 percent. As we argue over and over, the policy of tying health insurance to the workplace isn’t working for millions of Americans in a mobile, 21st century economy. We need new incentives for people to get health insurance that is portable from job to job and that allows them to make choices among plans that offer more affordable coverage.

Julie Rovner of National Public Radio captured the spirit of the uninsured debate in this segment for Morning Edition. In it, I argue that the real question facing the American people isn’t whether we are going to expand access to health insurance, but how we are going to do it — through expansion of government programs like SCHIP or by providing new incentives for people to get portable, private insurance.

Another figure of some concern in the Census report is the decline in the number of people with private, non-employer health insurance. In 1994, more than 31 million people bought private health insurance for themselves or their families. In 2006, that number had fallen to 27 million, even as the county’s population grew by 35 million over that time. Clearly, this market needs to be revitalized.


And on the presidential campaign trail, former Gov. Mitt Romney is the most closely watched of the Republican candidates on health care issues after his experience in Massachusetts. National Review Online published a symposium of responses from conservative health policy experts to his latest proposal. Here’s my take:

Gov. Romney is the most battle-tested of all of the Republican presidential candidates on health care issues. The proposal he initiated for the Commonwealth of Massachusetts went through the maw of the legislative process, and he necessarily had to make many compromises with an overwhelmingly Democratic legislature in order to get some version of his plan passed. But many people, especially conservatives, are troubled about the over-reach of state control that has been the result of Massachusetts’ health care legislation.

Now that he is running for president, Mr. Romney has an opportunity to talk to voters about his ideas, his true convictions, and the lessons learned from his experience in Massachusetts.

To his credit, his latest proposal does not call for an individual mandate that would require people to purchase health insurance. He also clearly understands the importance of having the federal government address the tax treatment of health insurance: He recommends changes that would allow insurance to be portable and not tied to the workplace, and he also would provide new subsidies to the uninsured to purchase private insurance. He also understands, as a former governor, the need to give the states more authority and resources to improve the health care economy.

It is important for Mr. Romney to reassure primary voters about his true convictions and to prove that he will stick with the free-market principles he articulated in his most recent address, that he has learned the consequences of over-compromising, and that he truly is on the side of competition and consumer choice.

And a CliffsNotes-type summary of the health plans by all of the presidential candidates has been produced by the Council for Affordable Health Insurance; it is worth keeping for quick reference.


We are gearing up for the next round of battles over reauthorization of the State Children’s Health Insurance Program. When Congress returns on Tuesday, conference committee members will be appointed to try to reconcile the significant differences between the bills passed by the House and Senate. They will try to craft one bill that can pass both houses and be signed by President Bush before the Sept. 30 expiration of the program. It’s going to be a challenge, to say the least.

And enjoy these last days of summer with a pleasant Labor Day weekend before the craziness resumes.

Grace-Marie Turner


State Children?s Health Insurance Program

The SCHIP Open: Hidden Incentives for States to Spend Federal Funds
Robert B. Helms
American Enterprise Institute, 08/07

Helms finds that expanding SCHIP could lead to a substantial increase in unfunded liabilities of the federal government in future years. Medicaid’s history reveals that the combination of open-ended federal entitlements and generous federal matching rates creates strong incentives for all states to expand eligibility and covered benefits. This results in rapid growth in total federal outlays and an increasing flow of federal funds away from states with greater poverty toward states with less poverty. Louisiana and Mississippi, for example, have higher poverty rates but receive lower federal payments, while a group of mostly northeastern states with lower poverty rates gets approximately twice the amount of federal funds per person in poverty.

Children’s Eligibility and Coverage: Recent Trends and a Look Ahead
Julie L. Hudson and Thomas M. Selden, Agency for Healthcare Research and Quality
Health Affairs Web Exclusive, 08/16/07

Hudson and Selden track changes in children’s public insurance eligibility and coverage, and they find that, as of 2005, 5.5 million children, representing 62% of all uninsured children, were eligible for but not enrolled in public programs. The number of children with public coverage rose from 16.2 million in 2001 to 21 million in 2005. And the number of children with private health insurance fell by more than 2 million over that time, from 13.5 million to 11.4 million.

The Administration’s SCHIP Regulations: A Sound Prescription
Nina Owcharenko
The Heritage Foundation, 08/27/07

Owcharenko writes that new SCHIP guidance issued this month by the Bush administration will reduce confusion over the purpose of the program and keep the reauthorization process focused on improving SCHIP as a program for low-income uninsured children. The regulations clarify and reinforce the original focus of the program by requiring states that want to expand SCHIP to adopt procedures to prevent substitution of private coverage for public coverage; meet basic federal enrollment benchmarks; and assure that at least 95% of children eligible under current law are enrolled before expanding coverage to children in higher-income families.

Prescription Drugs

The War on (Expensive) Drugs
Scott Gottlieb, American Enterprise Institute
The Wall Street Journal, 08/30/07

In a commentary about the problems with comparative effectiveness studies, Gottlieb writes that trouble arises when the government pursues studies to achieve its own economic goals and when political motivations intrude on the design and conduct of the trials, biasing how the results are interpreted and reported. For example, a series of follow-up studies on the $725 million Women’s Health Initiative, which found that hormone-replacement therapy contributed to heart problems, found that many of the study’s initial conclusions were premature, indefinite, or just plain wrong. Gottlieb writes that the inherent complexity and limitations of conducting these sorts of comparative drug trials need to be carefully considered before policymakers rush to tie sweeping payment and coverage decisions.

One-Size Medicine Does Not Fit All
Peter Pitts, Center for Medicine in the Public Interest
The Tampa Tribune, 08/27/07

Pitts writes about the dangers of using evidence-based medicine to create one-size-fits-all medicine. Patients and doctors often try a variety of different drugs before finding one or a combination that work, but EBM threatens to put a stop to such personalized treatment. EBM studies can lead to flawed analyses that generally eliminate about 60% of the variation that actually exists among individuals. By discounting the ways in which people differ, these methods inevitably eliminate treatments that could be very effective.

Health Systems Abroad

Britain the Worst for Deaths from Strokes
Nigel Hawkes
The Times, 08/24/07

The Times reports on a study in the British Medical Journal which finds that patients who suffer strokes receive worse treatment in Britain than anywhere in Western Europe. Britain spends as much as, if not more than, other countries on stroke care, yet 15% to 30% more stroke patients were left dead or disabled in Britain. In many countries in Europe, North America, and Australia, 20 to 30% of patients receive clot-busting drugs that can help patients recover from a stroke. The figure is less than 1% in Britain, where fewer than 66% of stroke patients were treated in stroke units and only a little more than 50% spent more than half of their stay in such a unit. The study finds European countries with better results tend to focus more on patient care immediately after a stroke, while in Britain the vast majority of money is spent on nursing care and hospital overhead, and little on investigations or treatments.

Private Sector Healthcare Can Also Be ‘Universal’
Emily Beuhler, AcademyHealth
The American, 08/09/07

Beuhler says that single-payer health care systems struggle to provide access to vision services, but in the UK, the NHS has improved access to vision care by deregulating and partnering with private opticians. The sale of eyeglasses is used to subsidize sight-test fees. Because the fee is an entitlement which customers can use at any practice, opticians compete to attract customers. Prices have come down while access to care has increased.

Canada Lags in Health Innovations
Pamela Fayerman
The Vancouver Sun, 08/28/07

Canada lags behind several other developed countries on health innovations, such as the development of new medicines and medical devices, according to a new study from the Conference Board of Canada. When compared with other OECD countries, Canada’s health care system ranked poorly, despite being the third highest per capita spender on health care, behind the U.S. and Switzerland. The study also finds that Canada has many fewer patents and applications, lower venture capital investment in research and development, and far less private or corporate collaboration with universities.

An Unhealthy Health Care Plan
Robert Goldberg, Center for Medicine in the Public Interest
The Washington Times, 08/21/07

Bob Goldberg responds to Arnold Relman’s recent commentary in the Toronto Globe and Mail opposing the Canadian Medical Association’s proposal to allow private competition into the country’s socialized health care system. Goldberg writes that Canada spends billions of dollars to reduce waiting times for specialty services, cancer care, and emergency rooms, but recent studies show that waiting times and shortages have gotten worse. Goldberg argues that the private market makes medical care more accessible in America and elsewhere where it is tried.


A Healthier US Starts Here!
Centers for Medicare & Medicaid Services Closing Ceremonies
Friday, August 31, 2007, 9:00 a.m. – Noon
Las Vegas, NV
For more information, contact Lauren Block at 202-690-2303 or

Vulnerable Populations And Health Care: How Can We Improve?
Health Affairs Briefing
Tuesday, September 11, 2007, 10:45 a.m. – 12:15 p.m.
Washington, D.C.

Sinking SCHIP: A First Step toward Stopping Growth of Government Health Programs?
Cato Institute Capitol Hill Briefing
Thursday, September 13, 2007, 12:00 PM
Washington, D.C.

Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at

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