The Phantom Uninsured

Investors Business Daily

Posted 06/16/2009 06:30 PM ET

Health Care: The administration uses the "46 million uninsured" as a reason to nationalize health care. But the Census Bureau says about a fifth of those aren’t U.S. citizens. In fact, a goodly number are illegal aliens.

At a town hall meeting in Green Bay, Wis., last week, President Obama spoke of the need to cover the "46 million people who don’t have health insurance." At another point he simply referred to the "46 million uninsured." At neither point did he refer to them as "Americans."

That was wise, because not all them are, the Census Bureau says.

According to "Income, Poverty, and Health Insurance Coverage in the United States," a Census Bureau report published last August, of the 45.6 million persons in the U.S. that did not have health insurance at some point in 2007, 9.7 million, or about 21%, were not U.S. citizens.

The Census Bureau does not ask if anyone is here legally or illegally, so we can’t tell how many are actually illegal aliens. We do know that throughout the Southwest and elsewhere, emergency rooms have been overburdened by a continuous flood of illegal aliens.

Also among the uninsured are 17 million Americans who live in households where the annual income exceeds $50,000; 7 million of those without coverage have incomes of $75,000 a year or more.

The notion that the uninsured are without health care is bogus, as well. They consumed an estimated $116 billion worth of health care in 2008, according to the advocacy group Families USA. Many of the uninsured are young and healthy (40% are between ages 18 and 34) and at this point in their lives, particularly in this economy, choose to put their dollars elsewhere.

Subtract noncitizens and those who can afford their own insurance but choose not to purchase it, and the number of uninsured falls dramatically. "Many Americans are uninsured by choice," wrote Dr. David Gratzer in his book "The Cure: How Capitalism Can Save American Health Care."

Gratzer cited a study of the "non-poor uninsured" from the California HealthCare Foundation.

"Why the lack of insurance (among people who own homes and computers)?" Gratzer asks. "One clue is that 60% reported being in excellent health or very good health."

The uninsured are not always the same people, and many are without coverage only for a relatively short time. Devon Herrick, senior fellow with the National Center for Policy Analysis, notes that "Being uninsured is a transitory state, since most uninsured Americans are only without coverage for a short time."

Herrick is backed up by the Census Bureau’s Survey of Income and Program Participation, which found a few years ago that only 19 million Americans go without insurance for a full year.

If the problem is the high cost of health care, there are private sector solutions the Democrats are ignoring. Some sensible ideas include ending costly one-size-fits-all mandates that drive up insurance premiums and lifting the ban on shopping for coverage nationally, allowing consumers to cross state lines to find the best deal.

Health savings accounts are another practical solution that is being dismissed by the Democrats. An HSA is an individually owned tax-exempt account that can be used to pay for routine treatment, including drugs, dental care and eyeglasses. There are no restrictions on choices of doctors, specialists, hospitals or tests.

People would be not just patients but consumers. Since HSAs are personal savings accounts, they encourage preventive care, since money not spent on illness is money that grows and accumulates. There is both a financial incentive to stay healthy and a nest egg of savings, should major illness arise. HSA funds can be used to pay health insurance premiums during job transition. They are completely portable between jobs.

The issue here is not providing health care, but who controls it. We believe health care is a matter between doctor and patient, not patient and bureaucrat. Obama says his plan is to ensure "that there is an option out there for people . .. where the free market fails."

But the free market has not failed, except when it’s been overburdened by overregulation, mandates and litigation to the point that it is no longer free. Bleeding the patient didn’t work as a medieval medical remedy. Neither will bleeding the taxpayer and using bogus numbers to justify it.