I Think I Know Where the Uninsured Have Gone

One of my favorite writers, Megan McArdle, asked the question recently, “Where Have All the Uninsured Gone?” It was an interesting piece to me because it chipped away at the philosophical underpinnings of our understanding of the uninsured. It must have struck a nerve with a lot of people since it had 1976 comments at last count. In that piece she says,

“Somewhere between 65 percent to 90 percent of the 2.2 million folks who bought insurance on the exchanges through late December seem to be people who already had insurance.”

One of the primary goals of the Affordable Care Act was to dramatically reduce the number of uninsured who were freeloading on the health care system. The idea was that they either belonged in Medicaid or they should be buying one of the affordable plans available through the health exchanges. This looks as American as apple pie. What could go wrong?

The problem is that health insurance must be marketed like it was a business. The Affordable Care Act took the path less traveled and that has made all the difference. The ACA focused on expanding subsidies and free health care. They assumed that the uninsured wanted health insurance and had the money to pay for it. The enrollment numbers makes it look like the Affordable Care Act supporter either forgot to talk to the customer or conveniently ignored what they said. The uninsured may care about health care but they definitely do not like paying for health insurance.

Then the Affordable Care Act supporters committed the ultimate marketing faux pas and ignored what the paying, healthy customers wanted. The problem is that un-subsidized health insurance costs are so much higher than last year that your best customers are freaking out. Freaked out customers is bad for business and encourages talk about the collapse of the health exchanges. Now we have a situation in which the uninsured are questioning why they should make the effort to acquire a health insurance through the exchange if the exchange is doomed to fail. The sad truth is that the people who are getting free or heavily subsidized insurance are not nearly as important to the insurance companies and the exchanges as the customers they can make a profit on. It is this profit that pays for the subsidies to the poor! If health insurance is a business then you must have a clue what the paying customers want and what they are willing to pay for.   I can’t say I didn’t warn you. The only people who care about health insurance and health exchanges is the middle class. Last year I wrote in Health Care Reform for the Forgotten Man:

Health insurance was a product created for the middle class and paid for by the middle class. The rich do need it and the poor do not have the money to buy it. Do we really want to go down the path in which health care insurance reforms do not make sense to the man and woman who are ultimately paying the bill? Are we really asking the most price sensitive people in the health insurance market to bear a disproportionate share of society’s burden for un-insurables and hope that it turns out okay?

Health insurance for the uninsured is much ado about nothing. All the poor want is someone to pay their hospital bills and they already have that. They just do not care about health insurance!