Will Health Reform Save Lives?

I promised to return to this question in an earlier post. Loyal readers know we have rejected the extreme and silly claim that 44,400 people die every year (one person every 12 minutes) because they were uninsured. Still, there are serious questions left unanswered. I propose to address them by breaking down the titular question into three component parts:

  1. Does being insured in general versus being uninsured add to life expectancy?
  2. Does being on Medicaid as opposed to be uninsured add to life expectancy?
  3. Is there something about the Affordable Care Act (ACA) that will add to life expectancy?

I want to begin with the third question because it’s a nice way to connect everything that’s wrong with research on the first two questions with much that’s wrong about the design of the health reform law.

Being uninsured is like being unemployed. It happens to lots of people for short periods of time. Of all the people who are uninsured at a point in time, more than half will obtain insurance within 12 months and 90% will be insured within two years. So if you want to argue that being eligible for Medicaid is better than being uninsured for most people you have to have a theory that says that extending Medicaid to the temporarily uninsured saves lives.

It gets worse. Since Medicaid eligibility is conditional on income, people become eligible and ineligible as their incomes rise and fall. So like uninsurance, Medicaid eligibility also is a condition that affects a lot of people for short periods of time.

So now you need a theory that says that temporary enrollment in Medicaid for the otherwise temporarily uninsured adds to life expectancy. I know of no studies that test this proposition.

[Parenthetically, almost every study comparing the uninsured with the Medicaid population and finding that Medicaid is good for health is looking at people who are chronically attached to these two states of the world. Austin Frakt has a summary here. Any findings for these two groups, however, are not generalizable to the population as a whole.]

But suppose that the pro-insurance crowd were right: suppose there was evidence that temporary Medicaid enrollment improves health and life expectancy versus temporary uninsurance. What would that imply about optimal health reform?

It would imply that we need institutions that are fast acting (lest the temporary conditions vanish). Yet if there is any appellation that does not in any way apply to ObamaCare, it is “fast acting.”

The individual health insurance mandate under the ACA, remember, is to be enforced by the IRS. And the income data on your last tax return can be up to two years old! (Longer still if you filed extensions.) Yet, it is this income data that determines whether your are eligible for a subsidy in the newly created health insurance exchange or whether you instead are relegated to Medicaid.

So what kind of reform would you want if you believe that temporary uninsurance is bad for health and continuous insurance is good? Obviously, you wouldn’t want to enroll people in a plan where eligibility changes every time family income bobs up and down. You would instead want to encourage plans that cover people for long periods of time. The help (subsidy) you make available can bob up and down as income changes — but enrollment shouldn’t follow the same rollercoaster. The subsidy may be income dependent, but enrollment should not be.

Ideal health insurance actually would not include Medicaid at all. It would involve people enrolling in private plans that are portable, and travel with them from job to job. And this result is consistent with other research. For although there is some argument about how much difference health insurance makes, almost every study finds that private insurance is better than Medicaid.

Comments (18)

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  1. Stephen C. says:

    Good post. The answer to your question is “no”. It probably won’t save lives.

  2. ken says:

    Excellent post. There is so much nonsense written on this subject, it’s refreshing to find a voice of reason.

  3. Vicki says:

    I don’t see why the left wants to hold onto Medicaid. The poor would be so much better off if they could enroll in private plans.

  4. Devon Herrick says:

    The studies that find the lack of health coverage is associated with increased mortality tend to track the uninsured only once in the study and make inferences that they remain uninsured during the whole length of the study. Furthermore, some variables are not controlled for. For example, health coverage is often tied to jobs and people have to be healthy enough to work. Health coverage (especially employer coverage) is also correlated with education and wealth. Numerous studies have found education and wealth are independent predictors of longevity. The uninsured are probably less risk averse that individuals with health coverage. Risky behavior contributes to shorter life spans. In other words, just giving an uninsured individual (that would have a shorter life span) health coverage will not ensure they change their behavior and lead a healthier life.

  5. Greg Scandlen says:

    This argument is actually one of the strengths of the single payer folks. Coverage is the same at all times, but the cost of the coverage varies with income, since it is income tax-based. Yet even in single payer systems the health status of people with low incomes and poor educations is much worse than the rest of the population. I believe there is some not-small portion of the population that can not cope with “insurance” of any kind. They are too dysfunctional to read a contract, schedule appointments, comply with follow-up treatments, and so on. These folks need direct delivery of services such as they can get at the emergency room.

  6. Linda Gorman says:

    To be fair, the studies that compare Medicaid to private insurance are suggestive, but often do not account for the fact that the Medicaid population differs from the the privately insured in ways likely have large effects on health status. (Less likely to be married, more likely to be substance abusers, etc.)

    However, there is a lot of evidence that at least some Medicaid groups do much better when provided with experimental Medicaid plans that operate more like private insurance–these are the Cash & Counseling experiments.

    The data are clear enough that one would expect some sort of expanded trials. Unfortunately, Medicaid supports a huge web of private businesses and non-profits that have a vested interest in ensuring that their Medicaid cash flow and power continues to increase. And it wouldn’t if patients controlled the cash flow.

  7. Neil H. says:

    I think Linda is right. The special interests are making too much money off the current system.

  8. Brian says:

    John’s conclusion is that health care reform will not save lives, and that the health care reform we need is provided by continuous insurance coverage.

    “Ideal health insurance…would involve people enrolling in private plans that are portable,” says John.

    Isn’t that what health care reform is promoting?? Most people will buy health insurance through the exchanges (especially once smaller employers drop their health coverage and point their employees to the exchanges). The exchagnes will be offering private plans underwritten by the Aetna’s and UHC’s of the world. People will then have continuous coverage whether or not they change jobs or lose a job. Subsidies will assist these people when they are temporarily out of a job.

    As for the ACA not being ‘fast acting’, I believe his analysis is wrong. While the IRS will enforce the mandate, that does not mean that the IRS will be issuing subsidies. The IRS will penalize those without coverage, and they will pay at the time of their tax filing. The subsidies however will be supplied through the exchanges at the time of purchase. So if you can prove that you qualify for a subsidy (pay stub, unemployment check, income verification through your employer, etc.) you will get it immediately.

  9. Erik says:

    Nice job John. You set the talking points then you describe how they won’t work. If I want this type of logic I might as well watch Fox commentary.

  10. Bruce says:

    Obama Care is going to cost lives. Have all you people forgotten about the death panels?

  11. Phil Haberstro says:

    Hi John,

    Quick gut reaction to your email… Rather than focus on life expectancy, I would suggest a qualitative focus on “quality of life.”


  12. Virginia says:

    I think you just posed a really good question. No one thinks to ask whether or not having more “coverage” will extend our lives.

  13. Linda Gorman says:

    With respect to enrolling in private plans that are portable, Massachusetts, the existing example of ObamaCare, does not offer plans that extend beyond the state’s borders.

    Given the restrictions on private insurers, ObamaCare plan networks are likely to HMO type organizations affiliated with local hospitals.

    A far better solution would have been to provide vouchers for people to purchase plans in the individual market. Those are portable, nationwide in many cases, with some worldwide coverage. Plus, the subsidies are explicit.

  14. Mark Fahey says:

    So 44,000 die from being uninsured, over 100,000 die a year from medical mistakes.
    It must be better to be uninsured!
    Both are rediculous statistical assumptions from erronous but widely accepted as gospel reports

  15. Brian, you have made a very thoughtful point. However, you forget that you only get the subsidy if you choose your plan from a whatever set is available thorugh the state-based exchange.

    To date California is the only state that has established an Obamacare exchange. (Massachusetts and Utah were pre-Obamacare.) It will have a politically appointed 5-person board that will selectively contract with carriers, and they will have to offer plans that meet the approval of the bureaucracy. It’s as if you could only buy your car from the DMV.

    Furthermore, they will not be long-term plans for two reasons. They will likely only offer plans with a term of one year, like Medicare Advantage, because it will be illegal to charge actuarially accurate premiums and the plans will have to negotiate risk-adjustment with the exchanges’ boards. This is the way Medicare Advantage works and the carriers will surely find that migrating the Medicare Advangate system (called Hierarchical Condition Categories) is the easiest way to operate in the exchange.

    Second, if you get a job with health benefits (which some will), you will have to drop your exchange plan and take your employer’s, until you switch jobs again.

    Of course, this is all fantastical dreamweaving: The exchanges won’t open up until January 2014, by which time Obamacare will surely have been repealed. So, any time spent designing exchanges is wasted time.

  16. Dr. Bob Kramer says:


    Good report. However, there is not one aspect that will solve the problem. The real culprits are the physicians who have given control to the insurance companies. I firmly believe that there is a conscious attempt to “screw the system” by doctors who have no regard for the mandate we were supposed to follow. Fear and greed take over, and the fact that reimbursement from Medicare and Medicaid are so poor that any institution in a teaching program by default cannot have a faculty member who can be present for every patient to OK the treatment plan, and the institutions upcode the visit to maximize revenue. And when they get caught, they pay a fine and go merrily on.

    The whistle blowers are usually physicians in the system, and I know they are bitter because the system wants to let them go, so they blow the whistle to “get even”. Also, there are big rewards for these guys as they will get a significant cash settlement. And as a physician, I know that every teaching institution does essentially the same thing. For many, they would have to close their facility to have a bottom line, and not even a good revenue stream at that.

    Also, you must agree that health insurance should change and become sick insurance. So the best doctors are who take care of the sickest patients. At some point, my profession (or what has become a business) needs to step up to the plate and and say “enough is enough”. The biggest deterrent is the fact that doctors don’t cooperate, collaborate, or communicate with their peers, so every doc has his own silo, and looks out for himself. We work under a plan that rewards the busiest and without any emphasis on quality, in spite of the attempts to develop best practices, care paths, gold standard or whatever.

    I had to deliver a talk several years ago to a national conference in Caracas about health insurance. I ended my talk and said that there was a way to return medicine to some basic tenets to follow: Do the right thing, for the right reason, by the right doctor, in the right place, at the right time for the right price.


  17. steve says:

    “Is there something about the Affordable Care Act (ACA) that will add to life expectancy?”

    Yes. Those who could not afford care before, will now be able to afford it. Having read over many of the studies on insurance and mortality, they all have some problems. Having once tried to set up one, they are very expensive (we abandoned it). However, I think there is more than enough suggestive evidence to lean towards it extending life. It would be easier to track if everyone was in the same medical system. I also think that there is some wisdom in people’s group actions. Everyone clearly wants to have health insurance. Those who can afford it, have it, as it is the surest way to make sure you can get medical care when you need it.


  18. Javier says:

    Health care has evolved from an attruislic endeavor to a money making enterprise. Health care is not the major priority of insurers, medical patent holders, and many of the providers. Too bad for us.