Advocates of universal coverage tend to discount the economic phenomenon known as “crowd-out.” Some simply don’t understand the concept, while others contend that it is nothing to fear.
Meanwhile, Maine’s “Dirigo” program has become the latest health care initiative to confirm that crowd-out is real and harmful. A new study sponsored by the Commonwealth Fund reports the following:
After 20 months of operation, almost 11,100 individuals were enrolled in DirigoChoice, about one-third of whom did not have coverage before enrolling.
In other words, two-thirds of the people who signed up dropped private insurance coverage to do so. This means that, in order to cover three uninsured citizens, the taxpayers had to pick up the health care tab for nine.
This vindicates a much-maligned study by Jonathan Gruber that showed how the crowd-out phenomenon relates to government health care programs. Gruber has recently revisited the data and reports the following:
Our results clearly show that crowd-out is significant; the central tendency in our results is a crowd-out rate af 60%.
The Maine experience was even worse. Dirigo’s rate was 66%. Presumably, even “progressives” can see that 3 for the price of 9 is not a good deal. So, why do they continue to ignore this problem?
[via OVER!MY!MED!BODY!]
Comments 8
Maybe you should actually read the study, the plan was not just to insure the uninsured but to provide also for the “underinsured”. I read no where in the study where 2/3 dropeed private insurance? in fact the “affordable” insurance in this program is provided through Anthem. finally the data is fro Sept 2006, give me a break will yoiu?
Posted 10 Dec 2007 at 9:12 am ¶drmatt, I see you are still impervious to objective data.
Posted 10 Dec 2007 at 10:13 am ¶“After 20 months of operation, almost 11,100 individuals were enrolled in DirigoChoice, about one-third of whom did not have coverage before enrolling.”
The point is, that 2/3 of the 11,100 DID have coverage before enrolling. Paid for by someone other than the government. Now they are funded by the government. How do you suppose their insurance was funded prior to this program? The fact that it is provided by Anthem has nothing to do with the source of the funds.
Posted 10 Dec 2007 at 12:12 pm ¶Funded and paid for are two different things, the underinsured where always a target of this program, so you would expect a large number of participants to have prviously been insured. When they were underinsured and got crappy care, who do you think paid for it then? you did what are you gripping about.
Posted 10 Dec 2007 at 1:27 pm ¶We are moving ever closer to that utopia in which the government provides for all and there is no personal responsibility. Instead of negotiating for good coverage for my employees, they and I will all pay much more in taxes than I pay now for their coverage, so that they can consume less healthcare services. I am sure we will all get everything we want and need.
No wait, we’ll get everything the government tells us we need. What we want, specifically, is irrelevant. We’ll spend more of our hard earned dollars for less, anyway. That only makes you happy of you have nothing the government can take away.
Posted 10 Dec 2007 at 3:45 pm ¶‘No wait, we’ll get everything the government tells us we need. What we want, specifically, is irrelevant.’
If you are at all bothered, you’ll realise that what lower income people want is affordable insurance, which is precisely what the Maine scheme is for.
Posted 11 Dec 2007 at 6:37 am ¶Thanks for the link, but far from not understanding the issue, I make the point that “crowding out” can certainly be interpreted as cherry picking since we are removing the lowest income (i.e. highest risk) individuals from the pool. AHIP chimes in whenever it convenient for the industry and let’s not forget that Medicaid managed care is certainly very profitable for the industry.
If 2/3 were previously covered, can you tell me if this was from commercial insurance or Medicaid? The under insured tend to bounce from one to the other, but especially on and off the Medicaid rolls.
Perhaps the real enemy are all those middle class people trying to get something for nothing.
So why is government pumping money into health care again? Let’s answer that question before you impetuously misrepresent questioning views.
Posted 11 Dec 2007 at 8:48 am ¶Crowd-out is the collective effect of many individuals responding to market incentives. It isn’t restricted to health care and it isn’t controlled by the insurance companies. No one entity can “cherry pick” the market in the way you suggest.
Posted 11 Dec 2007 at 9:22 am ¶Post a Comment