Health Insurance Reform Has Surprisingly Little Impact On Actual Health

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The health of the average American leaves much to be desired compared to that of their peers in other high-income countries, even though the United States spends twice as much on health care as those countries. Beyond this average, there is a significant inequality in health status. A 40-year-old American can expect to live less than 15 years if they are in the poorest 1% of Americans rather than the richest 1%. Black children living in the wealthiest areas of the United States have a higher mortality rate than white children living in the poorest areas of the country.

He combines many of these observations with another aspect of American "exceptionalism": We are the only high-income country without universal health insurance. Ultimately, they argue, the key to improving health and reducing health inequalities in the United States is universal coverage.

You are wrong. Although these two facts are true, they have nothing to do with each other. There are good reasons to support universal health coverage, but significantly improving population health is not one of them.

In fact, the evidence suggests that differences in Americans' health outcomes are not due to differences in access to health insurance or Medicare. On the contrary, the key to better health is more complex: it is changing a healthy lifestyle and reducing the impact of external sources of disease.

Perhaps the clearest evidence of how little health insurance reform has had on health is the experience of other countries that have universal health insurance but also have large health disparities. Think of Sweden and Norway, two Scandinavian countries with universal health insurance and generous cradle-to-grave social security systems. However, the difference in life expectancy between the top 10% of the national income distribution and the bottom 10% of the adult population in these countries is similar to that in the United States.

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Or consider the huge disparity in life expectancy among older Americans across the country, all covered by the same Medicare health insurance program. Researchers have identified which American cities perform better or worse in terms of longevity for older people and which offer more Medicare than others. However, the data suggests that the places you might want to go to extend your life after retirement aren't the places you would go if you wanted more Medicare.

In fact, it's widely accepted among researchers that Medicare, let alone health insurance, isn't the only or even the most important determinant of health. On the contrary, the key to distinguishing between better and worse health lies in the air we breathe, the food we eat and the cigarettes we smoke or don't smoke. This means that the main public policy to improve health should aim to eliminate these health causes through pollution control or taxes on carbonated drinks and cigarettes. Significant health improvements are not achieved through health insurance and Medicare.

How could that happen?

Not because health insurance is not important for health. Of course it does. But the impact of health insurance reform is too small to significantly change the large income-health gap in the United States or significantly improve the ill health of the average American.

Behind this relative insignificance of health insurance lies a surprising but not entirely understood fact: Nobody in America is insured for their health care. Instead, the nominally "uninsured" — those without formal health insurance — continue to receive large amounts of Medicare that they don't pay for.

There are public policy provisions and an extensive network of public funds aimed at providing free or significantly reduced healthcare to those who are not nominally insured. And no, we're not just talking about the ER here. Through a variety of federal, state and local actions, governments have created a large and complex network of regulated and publicly funded programs that provide free or low-cost preventive and managed care for chronic health conditions. and emergency medical care for the uninsured and underinsured.

This point is illustrated by data from Oregon, where the state introduced a health insurance lottery in 2008. The process was similar to a clinical trial of a new drug: one patient was randomly assigned to the new drug while others were recruited. Ancient medicine or sugar pill. Except in this case, Oregon randomly gave public health insurance to about 10,000 uninsured, low-income adults, but not thousands of others who signed up to "win" free public health insurance. The results of this lottery show that providing policyholders with formal health insurance has real benefits: better protection against inflated medical bills, greater likelihood of purchasing a medical home, greater access to health care, and ultimately better health.

But the study results revealed something interesting about the experience of the uninsured: Uninsured people receive about four-fifths the Medicare benefits they would receive if they were insured. This healthcare includes primary care, preventative care, prescription medications, emergency room visits, and hospitalizations. And they only pay 20 cents for every Medicare dollar they receive. In other words, they are not real believers. Previous insurance has more to do with the care the insured receives (and does not receive) than the labels suggest.

And once we realize that everyone in America has access to Medicare, it becomes clear why this formalization of access—while important for other reasons—is unlikely to have a significant impact on population health or significantly reduce overall health inequalities.

The surprisingly limited role of health policy or health insurance in public health is not a new observation. Half a century ago, economist Victor Fox, now 99 and one of the founders of health economics, put it this way in his famous book A Tale of Two States. It describes two contiguous states in the western United States that are similar in many aspects important to health, including Medicare, income, education, climate, and urbanization. However, one state had the healthiest people in the US. Their neighbors in other countries were less healthy and had a 40-50% higher annual mortality rate.

You can get an idea of ​​where Fox was going with this comparison if we tell you that the two states were Utah and Nevada. And the people of Utah were much healthier.

Fox famously attributed the lower mortality rates of clean-living, mostly Mormon Utah residents to their improved health behaviors. Their Nevada neighbors enjoyed what he called "softer" rules. Smoking and drinking rates in Utah were much lower than in Nevada. The differences in mortality between the two states were particularly pronounced for diseases directly related to this behavior, such as lung cancer and liver cirrhosis.

Fox's simple table of age- and sex-specific death rates in Utah and Nevada seems outdated by today's data science standards. But his central argument has stood the test of time. The ensuing half-century of positive action has revealed an important but often overlooked conclusion: health insurance policies cannot be relied upon to improve health and reduce health inequalities.

Adapted from "We Got Covered: Rebooting American Healthcare" by Liran Enoff and Amy Finkelstein in consultation with Portfolio, a division of Penguin Random House LLC, a subsidiary of Penguin Publishing Group. Copyright © 2023 Liran Einau and Amy Finkelstein.

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