Is America in the midst of a health insurance crisis?
That's the picture Democrats in Washington are painting.
According to their narrative, health coverage is out of reach for a number of Americans. Only an aggressive — and exorbitantly expensive — effort to expand the number of people covered by taxpayer-funded insurance will bring this emergency to an end.
Their proposal is not just ill-conceived, but unnecessary.
A close look at the uninsured population reveals that the share of people who lack access to affordable coverage is small.
Democrats are trying to use their $3.5 trillion budget reconciliation package to make even more Americans dependent on government for health insurance.
They want to bring Obamacare's Medicaid expansion — or something like it — to the 12 states that have thus far refused to open their programs to those who make up to 138% of the poverty line, or $12,880 for an individual.
Progressives also want to bring about 23 million additional Americans into Medicare by lowering the program's eligibility age to 60.
They're looking to add dental, vision, and hearing benefits to the program, too.
People who purchase insurance coverage through the exchanges are in line for greater federal handouts. The American Rescue Plan Act, which passed in March, amped up exchange subsidies and capped the amount that any American must pay for coverage at 8.5% of income.
Democrats want to make those more generous subsidies permanent.
The implicit assumption behind all of these policies is that Americans lack access to coverage in large numbers.
That assumption is questionable.
It's true that nearly 29 million Americans are uninsured. But most of them have access to affordable coverage.
One-fourth are already eligible for Medicaid or some other form of public health insurance but haven't signed up, according to figures from the Kaiser Family Foundation.
Another 38% qualify for premium subsidies through Obamacare's exchanges. Twelve percent have access to coverage through an employer but have chosen not to enroll.
About 4% of the uninsured had incomes that were too high to qualify for exchange subsidies, before the American Rescue Plan Act changed the rules.
That leaves two groups of uninsured people who may truly be unable to afford coverage. About 3.8 million uninsured people — 13% of the total — are not U.S. citizens. They wouldn't be eligible for the expanded health insurance programs contemplated by Democrats.
And just under 2.2 million uninsured people — 8% of the group — would be eligible for Medicaid under the terms of Obamacare's expansion of the program but live in the 12 states that have not done so.
So Democrats want to spend hundreds of billions of dollars transforming the welfare state ostensibly to address a "crisis" of access to affordable insurance that afflicts less than 1% of the U.S. population.
Even if this situation demanded a swift and decisive policy response, the left's preferred solutions — making more Americans eligible for public coverage and expanding Obamacare's insurance subsidies — have proven inadequate.
More than 18 million uninsured Americans already qualify for public coverage or meet the requirements for federal subsidies. But they've chosen not to avail themselves of these options.
Ratcheting up subsidies may attract more at the margin — but at significant cost to taxpayers, potentially higher cost than the level of value new enrollees ascribe to the benefits.
Meanwhile, despite the existence of Obamacare's tax credits, the number of uninsured Americans has ticked upward every year since 2016.
Expanding Medicare to Americans over the age of 60 would largely substitute private coverage for new public coverage. According to one recent analysis, 93% of those who would become eligible for Medicare under this reform already have insurance.
Democrats say they want to tackle America's uninsured crisis. But the data do not indicate anything approaching a crisis. And effectively helping those who truly cannot afford health insurance costs much less than the Democrats are intent on spending.
Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is "False Premise, False Promise: The Disastrous Reality of Medicare for All," (Encounter 2020). Follow her on Twitter @sallypipes. Read Sally Pipes' Reports — More Here.
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