Halving Premiums Would Cut Uninsured by 3%, Study Finds
Government subsidies that reduce health insurance premiums by 50% would decrease the number of uninsured U.S. residents by 3%, according to a study published online Monday in the journal Health Services Research, USA Today reports.
The study, conducted by RAND researchers, gathered information from the records of 19,500 California residents who purchased health insurance between 1997 and 2001 from the three largest nongroup insurers in the state; U.S. Census Bureau data; and a telephone survey in California conducted between 2002 and 2003 of 4,000 people with health coverage and 400 families with at least one uninsured adult (Appleby, USA Today, 7/17).
The study shows that people who purchase health insurance would like policies that include more benefits and lower deductibles, even at the cost of higher premiums.
Lead author Susan Marquis said, "It's evidence of risk aversion. People would rather pay a little more now and reduce their risk of having a bigger loss in the future. If that weren't true, you probably wouldn't buy insurance" (RAND release, 7/16).
The study also showed that reducing a policy's deductible by 20% would increase the likelihood of uninsured residents purchasing that policy by less than half of one percent.
Marquis said, "Price does matter, but it matters less than many people would hope."
The study found that barriers to acquiring insurance include the "hassle factor" of buying a policy, the desire to spend one's money on other things and the belief that one does not need coverage -- either because they do not think they will get sick or think they can get affordable care without coverage, USA Today reports.
According to Marquis, the study suggests that requiring people to obtain insurance might be the only way to achieve universal coverage.
Len Nichols, an economist with the New America Foundation who was not involved in the RAND study, said the uninsured fit into two groups: the low-income and the "immortals" -- those who do not expect to get sick.
He said, "The humane thing to do is have subsidies for the low-income, and they'll buy, and then mandate coverage for the immortals" (USA Today, 7/17).