The trouble with universal healthcare coverage

There's a big difference between universal coverage and access to care.

from the April 11, 2007 edition

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And yet, in reviewing the academic literature on the subject, Helen Levy of the University of Michigan's Economic Research Initiative on the Uninsured and David Meltzer of the University of Chicago, were unable to establish a "causal relationship" between health insurance and better health. Believe it or not, there is "no evidence," Ms. Levy and Mr. Meltzer wrote, that expanding insurance coverage is a cost-effective way to promote health.

Similarly, a study published in the New England Journal of Medicine last year found that, although many Americans were not receiving the appropriate standard of care, "health insurance status was largely unrelated to the quality of care."

Another common concern is that the young and healthy will go without insurance, leaving a risk pool of older and sicker people. This results in higher insurance premiums for those who are insured. But that's only true if the law forbids insurers from charging their customers according to the cost of covering them. If companies can charge more to cover people who are likely to need more care – smokers, the elderly, and others – then it won't make any difference who does or doesn't buy insurance.

Finally, some suggest that when people without health insurance receive treatment, the cost of their care is passed along to the rest of us. This is undeniably true. Yet it is a manageable problem. According to Jack Hadley and John Holahan of the left-leaning Urban Institute, uncompensated care for the uninsured amounts to less than 3 percent of total healthcare spending – a real cost, no doubt, but hardly a crisis.

Everyone agrees that too many Americans lack health insurance. But covering the uninsured comes about as a byproduct of getting other things right. The real danger is that our national obsession with universal coverage will lead us to neglect reforms – such as enacting a standard health-insurance deduction, expanding health-savings accounts, and deregulating insurance markets – that could truly expand coverage, improve quality, and make care more affordable

As H.L. Mencken said, "For every problem, there is a solution that is simple, elegant, and wrong." Universal healthcare is a textbook case.

• Michael Tanner is director of health and welfare studies at the Cato Institute, where Michael Cannon is director of health policy studies. ©2007 Los Angeles Times Syndicate.

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