Health Care Reform Part 1: Lies, Damn Lies, and Statistics

45.7 Million in America Are Uninsured

“There are three kinds of lies: lies, damned lies, and statistics.” -Benjamin Disraeli

Where did the estimate of 46 million people in America without health insurance come from?  You probably have health insurance through your employer or through some other means.  However, there are people in this country without insurance.  What does it mean, and why is the number’s background not nearly as scary as the number itself?  Read on…

The Can of Worms

I will not use this article to suggest an effective health care reform.  I strongly believe that there are efficiencies in the health care system which are not being realized.  Most likely, I will follow up with another article discussion other aspects of health care reform.  However (!), this specific article is meant to solely address the most commonly repeated fact in the health care debate- the question of how many people are without health insurance and why.  Whew… read on.

Heavily Quoted, Lightly Understood

Both President Obama and Christina Romer, the White House Council of Economic Advisors Chair, have made statements to the effect that there are 46 million uninsured in the United States.  Where exactly did this number come from?  In August 2008, the U.S. Census Bureau released this report (I highly suggest that you at least skim this report, start on page 27) reporting that there are 45.7 million people in America who do (did?) not currently have health insurance.  There is no question to the stastistical accuracy of the samping… as page 9 states, all comparative statements are significant at a greater than 90% confidence interval (again, unless it is stated it isn’t).

Break it Down

45.7 million people in America had insurance.  Note I said “people in America”, not Americans… the report is a statistical sampling of people in America, but not specifically American citizens.  This is an important point, and one that speakers have been careful to dissemenate accurately.  If you parse the speeches which mention the 46 million number, you will note that the speaker will never say “American citizens.”

According to the article, 15.3% are without health insurance, down from 15.8% in 2006.  In 2006, 47 million people in America were estimated without health insurance.  In 2007, 253.4 million people had health insurance, up from 249.8 million the previous year.  Furthermore, the government provides coverage for 83 million people, and 202 million had private insurance (yes, there is an overlap).

Our total population considered in this study is 299.1 million.  45.7 / 299.1 does equal 15.28%.  Still, who comprises the 45.7 million?  Is 46 million a number which denotes people without insurance for a whole year?  Do they even want health insurance?  How many non-Americans are included in that total?

The Census has a disclaimer in the report which states it over reports the number of uninsured chronically (page 27) and that you should take a look at a CBO report, and a Survey of Income and Program Participation Working Paper (#243, June 2004).  This report is the CBO report from 2003.  They report a number between 21 and 31 million who can’t get insurance for an entire year.  Here is the Working Paper.

Judging the ‘want’ of people and their health insurance is hard to say.  According to the report, the real median household income in the United States was $50,233 in 2007.  Knowing half of households made more means we can perhaps look at the uninsured stats by income and take a guess who could afford health insurance.  There were 17.603 million people in households making more than $50,000 who were uninsured.  This leaves 28.1 million uninsured but perhaps wanting insurance, or (28.1 / 299.1 =) 9.4%.

9.737 million uninsured are non-citizens, and would not be covered under any health care overhaul anyway.  22,214 million people total are non-citizens.  There are (299.1 – 22.2 =) 276.9 million citizens in this scenario, leaving (36 / 276.9 =) 13.0% of citizens uninsured.

Parsing the Rhetoric

The most important number, which also happens to be the most unclear, is the number of American citizens who chronically cannot receive health insurance.  There are other ways to slice the data… there is a large number of younger people in America who do not have health insurance, for example.  Any reform should concentrate its resources not on the headline ’45.7′ million number, but a vastly smaller number.  The disagreement about a Government-run solution versus a market solution will continue even with clearer statistics, but keep in mind how these numbers are being twisted the next time you hear them repeated as fact.

Now that that’s over with, I’ll get ready for some more articles on the subject.  Eventually, I’ll discuss why any public plan will overrun its budget in short order.  After that, I’ll write about how the market can be harnessed to provide the care we desire for the underserved.  Sit tight.

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