Dean Baker on the Uninsured
Dean Baker correctly takes to task people who claim that the estimated average cost of covering the uninsured with Obama’s proposal is a whopping $62,500. Here’s his key paragraph:
Republicans were quick to put the cost at $62,500 for each additional insured person. This is a good joke, but has no place in serious policy discussions. The relevant question is the cost per year ($6,250). If the projections were done over 20 years, then the cost would be $125,000 per insured person using the Republican methodology.
But then Baker himself makes an important error, claiming incorrectly that the number of people in the United States who go without health insurance for a whole year is 45 million. It’s actually substantially lower than that. Baker does cite a source for his statistics. But although the source he cites refers to a Census Bureau estimate of this 45 million figure, this very source states (in Table 2, page 6) that in 2002, 92.1 percent of people had health insurance coverage at some time in the year. That leaves 7.9 percent of people with no coverage for the whole year. 7.9 percent of a 2002 population of 281 million is 22 million. If the same percent applies to 2008 (and these percentages vary little year to year), that makes 7.9% of 304 million, or 24 million, only a little over half of the number Dean Baker claims.
Why the huge difference? The Congressional Budget Office explains:
The CPS [Current Population Survey] is the source of that widely cited estimate of about 40 million uninsured. By interviewing people in March about their insurance coverage the previous calendar year, the CPS is intended to yield an estimate of the number of people who are uninsured all year. However, comparisons with estimates from other surveys indicate that the CPS estimate overstates that number. Some analysts believe the overstatement stems from an underreporting of insurance coverage by CPS respondents, who are asked to recall their coverage over a longer period than other surveys require.(4) Other analysts have concluded that the similarity of the CPS estimates to the point-in-time estimates from other surveys suggests that many CPS respondents report their insurance status as of the time of the interview rather than for the previous calendar year, as requested.(5)