The lack of health insurance is a growing problem for the
country as both the cost of health insurance and the number
of uninsured continue to rise. Many have suggested that employers
should bear more of the cost of insuring the populace, expanding
coverage and paying for larger portions of it. Yet, as Helen
Levy, assistant professor at the Harris School, finds, insurance
costs may not be the reason why people are uninsured.
After all, she points out, “a big chunk of the uninsured—10%
or 4 million people—are quite well off financially.” She
instead looks to the general cost of living as a reason for
opting out of insurance. If families are choosing not to
buy health insurance, Levy asks, “then what are they
buying?” And do their choices crowd out health insurance
in the household budget?
To answer that question, she and coauthor Thomas DeLeire,
an assistant professor at the Harris School, examine household
expenditures on a range of goods and services and find that
the uninsured as a group devote a larger share of their budgets
to basic needs—54% of their budget compared with 48%
for the insured. Looking only at low-income households, they
find that the uninsured spend $88 per month more on housing
than do comparable insured households, $40 more on food at
home, $35 more on education, $20 more on alcohol and tobacco.
High housing costs, therefore, may help explain why low-income
households do not have health insurance. Further, renters,
who are more likely to be low-income, are most vulnerable
to the forced trade-off.
Further research will tell us just why housing eats up more
of their income, and therefore what we can do to help these
families. “A lot could be going on,” says Levy. “Families
could be facing credit constraints and are unable to get
a mortgage, forcing them to rent, which costs more. They
may also live in areas with higher housing prices, or maybe
they lost a job and had to move and now rent because of it.”
“The point is,” she says, “that we should
pay more attention to the connection between the cost of
living, especially housing costs, and insurance” when
assessing the reasons for the rising ranks of the uninsured.
“Just focusing on health insurance market isn’t
going to be enough. If what’s really going on is the
cost of living, then mandating employers to offer health
insurance isn’t going to reduce the number of uninsured.”
“When we think about why households are uninsured,
the discussion should be extended beyond income and the price
of health insurance to include a role for the prices of other
goods.”
For more on this topic, see Helen Levy, “What Do
People Buy When They Don’t Buy Health Insurance and
What Does that Say about Why They Are Uninsured?” NBER
Working Paper No. w9826, available online at papers.nber.org.
Barbara Ray
|
