The Uninsured: Adverse Selection Problem or Distribution Problem?

In his recent post on health care and insurance Paul Krugman writes:

[Insurance companies] try to avoid covering people who
are actually likely to need care.

If insurance companies do avoid covering people who are
"likely to need care," this suggests that the uninsured are
unhealthy.  But 60% of the uninsured are in excellent health
(Table 10) (In fact, overall the uninsured are only slightly less healthy than the insured).

To be sure, this doesn't mean that being uninsured is not a problem
but, contra Paul, it does mean that insurance companies would be
willing to cover most of the uninsured at the same rates as the insured
if the uninsured could or would pay those rates. In Paul's story there is a market failure, in the latter story health insurance is expensive and some people don't buy it.  The difference matters because the wrong diagnosis will almost surely lead to the wrong treatment.

Addendum: McArdle nicely takes the time to follow the logic.


for there to be a "market success" wouldn't you need both the insurance companies covering people at existing rates PLUS some ability for people to see and understand the basis for the cost of their insurance? and for that, people would have to assess their health care needs properly _in advance_?

I have not read Krugman enough to say that he always preaches the truthy liberal preconceptions to his choir, but I haven't seen otherwise. Keep hammering him on these points Alex. Bravo.

And again, the unhealthy don't need insurance. Insurance is for the pooling of risk. There is no risk the unhealthy will become unhealthy. They are unhealthy. They don't need insurance, they need wealth, income, or charity.

Morten, that's why I said "suggests" rather than "implies." In anycase, key point is that insurance companies would be willing to cover most of the uninsured at the same rate as the insured.

ZOMG! I love economists. "If insurance companies do avoid covering people who are "likely to need care," this suggests that the uninsured are unhealthy." Dude, insurance companies spend huge amounts trying to avoid covering people who are likely to need care. It's called underwriting, or in more extreme forms, rescission, and it is not secret. They spend a lot of money on it.

At its most benign, underwriting just means putting a price on the policy that is commensurate with you risk. So if you will have a $100,000 claim next year, the insurance company will set your premium at $100,000 or deny coverage. At its worst it is rescission of a medical policy with a large claim for specious reasons, such as a doctor's visit for acne years ago.

I would suggest that every two years economists need to take a reality check. That could help prevent embarrassing posts like this one.

Alex, do you agree or disagree with Krugman's claim that insurance companies use a lot of resources trying to avoid covering the sick? If that's true, then it's a problem whether or not the sick end up getting covered. The insurance companies could be competing over who ends up covering the sick.

Also, it's not clear that the difference is all that slight. Take a look at Table 1. Table 10 lets you see who's uninsured, but Krugman's claim is that this is a problem for sick people who don't get care, not that it's the main explanation for why people are uninsured, so I think it's more relevant to see what sort of insurance the sick have (which is in Table 1). 21% of those in fair/poor health are uninsured, compared with only 15% of those in excellent/very good health (and you'd expect those in poor health to be more motivated to get insurance). Further, those in fair/poor health are much more likely to receive public health insurance (Medicaid or other) than those in excellent/very good health (39% vs. 13%). They are also less likely to have individual private insurance (3.7% vs. 6.1%).

I think your evidence might suggest that the answer to the question in your title is, "yes." Some theories point out that the uninsured should be less healthy, i.e. that the reason that they are uninsured is because they are denied coverage due to the fact that they are unhealthy. Other theories suggest that it is unhealthy people who demand insurance on the individual market, thus leaving those who are uninsured as those who are more healthy. The distributional theory suggests that they are just as healthy, but that the uninsured are just more budget-constrained. The figures you cite don't sort out these effects.
There is a White House study out today that indicates higher per-person prices for small businesses than large ones. There might be some economies of scale here, but could something else be at work?

Here's another way to slice the data (doing some calculations based on Table 1). Of those who get private insurance (either through their employer or individually), 5% are in fair/poor health and 76% are in excellent/very good health (the numbers are almost the same for the 2 sources of private insurance). Among the uninsured, 10% are in fair/poor health and 60% are in excellent/very good health. So I doubt that "insurance companies would be willing to cover most of the uninsured at the same rates as the insured."

There are a lot of sick people with public health coverage, which is why the gap in Table 10 doesn't seem so big. On Medicaid, 17% are in fair/poor health and 57% are in excellent/very good health. On other public health coverage, 37% are in fair/poor health and 39% are in excellent/very good health.

There is no risk the unhealthy will become unhealthy. They are unhealthy. They don't need insurance, they need wealth, income, or charity.

Or insurance they bought when healthy, which cannot now be rescinded when the insurance company has lost its bet.

I would say that cute little statistic isn't significant unless you also include the percentage of people in excellent health who do have insurance because a discrepancy could be used to support what Krugman said right? What a joke.

N.C. high-risk pool an option for many seeking health insurance

"The plan covers three groups of people: Those who cannot get group coverage and face higher premiums because of pre-existing conditions, those who have run out of COBRA coverage after leaving a job and trade-displaced workers who have lost their jobs because of globalization."

I'd rather see 50 states trying to independently work out coverage for their uninsured than see the creation of a new Federal behemoth.

'key point is that insurance companies would be willing to cover most of the uninsured at the same rate as the insured' - if they insured everyone en masse, that is. But you are not making a point about what would happen if there was mandatory universal coverage here; your data doesn't say anything as to whether there is a large group of people that insurance companies won't cover. There definitely are lots of people who choose not to insure, but there are likely to be lots of people who are denied insurance *at the going rates* too.
1. Don't treat health status as a binary variable just because this report does! You can be many different types of unhealthy.
2. Also, does health status refer to *current* health status or health status when taking up insurance?
Your points are almost invariably insightful even though often counterintuitive, but you are spectacularly wrong here.

Candadai Tirumalai: "People with a pre-existing condition either have to get group insurance through an employer or do without, the individual option not being open to them."

That's not correct. 35 states have established high risk pools which force insurors to provide coverage to such persons.

Why did you pick this paragraph out of Krugman's article? Granted, if you disprove him on that argument, then his whole post is not much better than what an 8 year-old suffering head trauma could whip up. He has other paragraphs, such as this one:

There are two strongly distinctive aspects of health care. One is that you don’t know when or whether you’ll need care — but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor’s office; and very, very few people can afford to pay major medical costs out of pocket.

Has he never heard of fire, flood, or auto insurance? This is just a stunningly stupid paragraph for a guy with a Nobel Prize. He goes on to show he's never read or forgets his Adam Smith. It's almost like a free-market economist is ghost writing to set up the perfect straw man.

Richard: Let's hear that one more time: Insurance isn't health care.

Alex: Don't you mean "The difference matters because the right diagnosis will almost surely lead to the wrong treatment." At least from Krugman's PoV?

Your focus on technology ie American health care spending being a luxury problem is misguided: in amounts most European countries spend about half per capita on health care than the U.S. I can hardly imagine that the French and Germans are in the medical stone age cq that their health care is twice as cheap because its half the quality.

Has he never heard of fire, flood, or auto insurance? This is just a stunningly stupid paragraph for a guy with a Nobel Prize. He goes on to show he's never read or forgets his Adam Smith.

Funny that you mention this because in my version of the Wealth of Nations Smith explicitly states the infeasibility of calamity insurance.

From WoN, book I chapter X
Taking the whole kingdom at at average, nineteen houses in twenty, or perhaps ninety-nine in a hundred, are not insured from fire.

Even (or espescially) Smith noticed that there is something special about risk markets.

@Yancey, Richard

That's right: insurance isn't health care. But how can either work efficiently? The difference between fire/flood/auto insurance and health insurance is that the former covers distinct events. Your "health" is a nebulous concept. Have a terminal illness but no pain? Perhaps that's healthy enough. The costs of health care (whether paid by insurance or not) are a moving target. How do you define utility in this context? Economists are trying to put a frame around this topic that won't hold it.

...Do you think Alex is going to post a correction? I doubt it, but one can hope.

Krugman is relying on a 45 year old claim about market imperfection to assert that markets can't deal with informational asymmetry. Since then, we have had all kinds of innovations-- where the markets have been free enough to innovate.

It's difficult to argue how well our health insurance (or health care) markets could work. They are regulated in a manner almost calculated to minimize innovation.

Writing "suggests" rather than "implies" does not cure your rudimentary logical blunder. "Most A are B" neither suggests, implies, or in any way contributes to the likelihood of "Most B are A." Be honest and remove it.

What states have the greatest problem with the uninsured? Draw a line from California to Florida along the southern US border. With a blip for Oklahoma.

What jobs are uninsured? Services and construction. Often small firms that will be exempt from the "reforms"

We will spend trillions to insure fewer then 20 million additional citizens (after you subtract who will not be covered under the new plan or who are currently covered and subtract illegal immigrants).

This is crazy

This is an interesting blog. The majority of people on here don't value the goal of universal coverage. But, then, what do you expect from a libertarian blog.

John Dewey at Jul 27, 2009 10:13:42 AM:
"don't impose your values on me and have the government take my money"

It's funny - you want to cut off your nose to spite your face. The government needs to be able to control the costs of medical care now, otherwise they will end up taking much more of your money in the future. Unless you think old people in the future will vote against increasing taxes to keep Medicare solvent.


I read and remembered your comment. My condolences for your grandmothers.

The choices you present are not comprehensive. A strict cap is not the only solution to fiscal sanity:

- We could have a system whereby co-insurance requires patients to evaluate whether they are willing to pay even 20 to 30 percent of the costs of keeping them alive for an extra six months.

- We could have a system where insurance offers to pay you (or your family), say, half of the saved costs above a certain cap for foregoing certain end-of-life heroics.

There are, I believe, innumerable alternatives that have never been proposed because health insurance innovation is thoroughly discouraged by regulations.

How about a thought experiment. According to this 2004 abstract, the per capital lifetime healthcare expenditure is $316,600. Imagine a man purchases a high deductible plan at age 21, makes no claims in excess of deductible until age 50 when a hospitalization causes a $50,000 claim. The man requires drugs or treatment $5,000 in excess of deductible for the rest of his life, and at age 85 he dies after a $100,000 hospital stay. I think this is one plausible distribution of $320,000.

If you're still with me, the NPV of that cost stream at 6%, at age 21, is $23,500. Financing it at 8% (a nice spread) is $158 a month. I don't know how much mutual insurance would add to that premium, but I'd be surprised if it's more than 50%.

How can you incentivize the young and healthy to buy in? Same way you do with life insurance. Start coverage at age 25 and it's $100 a month, start at age 35 and it's $200.

The problem is not can private insurance markets create a product like this. Of course they can. The problem is in much of the country they wouldn't be allowed to sell it.


I wasn't looking to be comprehensive, only trying to point out that insurance (and cost containment, for that matter) is only financially sustainable if the premiums (or out of pocket costs) of the pool is greater or equal to outpayments of the plans. You are correct, there are a number of innovative ways to make such caps work, and seem less heartless to some, but in the end the financial math cannot be avoided.

I am former executive with a national group insurance company who has held positions in Underwriting, Marketing and Product Management. I have firsthand knowledge of Commercial HMO, Medicare HMO, small group (50-200 employees) and large group (200+), including multi-site national accounts. Here’s what I believe is needed in any “reform† legislation.

1. Tax health insurance premiums paid by employers as any other compensation. The current exemption was a reaction to Federal Government wage and price controls and did not evolve in a free market. The current tax treatment masks the true cost health insurance leading to distorted behavior at the consumer level.
2. Mandate that every resident of the US be covered by a health insurance plan whether employer provided, through a union or individually purchased. The controversies over “pre-existing conditions† and individual underwriting are resolved if everyone, from birth, has coverage. There are no “free riders.† The political process can decide at what level of poverty premiums should be subsidized by taxpayers.
3. Establish a minimum benefits plan. The Devil will truly be in these details, but without a minimum plan the issue of the underinsured will remain. Except for the poorest among us the plan should call for cost sharing for all but preventive care and the treatment of chronic disease. The focus should be on protection against catastrophic expenses, the kind that bankrupt families, rather than day to day expenses. The degree of personal responsibility (that is, how much you must pay yourself) could be established as a function of family income much as today’s medical expense deduction is.
4. Establish premiums using a “community rating by class† methodology (CRC). This provides for some recognition that medical expenses, in fact, vary by age, sex and geographic local. In addition, at the individual insured level, allow for “good health† discounts from the CRC premiums for those who meet certain standards shown to be consistent with lowered medical costs such as not smoking, maintaining an appropriate weight and following preventive care regimens.
5. Provide for risk adjustment pools among participating insurers. This protects any single insurer from attracting more than the “normal† number of catastrophic cases. Participating insurance companies would pay into this “re-insurance† pool which would be required to be self supporting (no government subsidy).
6. Abolish all State mandated benefits. There must be a single, national plan available to all. With the other provisions listed this will ensure that insurance is portable, freeing American labor to move to better opportunities without fear of losing insurance.
7. There is no need for a “Public Option† if these rules are implemented, but if we must have one it must be self supporting (no government subsidy) and adhere to the same rules as private plans. Furthermore, any fee schedule “negotiated† by a Federal plan must be available to any participating insurance company as well.

I am the David who usually posts here as David, but not the one who posted at 2:27:47. Nevertheless, I agree with everything he wrote except for #4. Geographic = political.

I'll use "David N" from now on to avoid confusing name collisions.

Fool: "The government needs to be able to control the costs of medical care now, otherwise they will end up taking much more of your money in the future."

Are you a young fool or an old fool? No one who has observed the federal government the past five decades, as I have, would ever believe the federal government is in any way capable of controlling costs.

David: "Tax health insurance premiums paid by employers as any other compensation"

David, if you have achieved the executive ranks of a large insurer, you are no doubt politically savvy. I'm sure you are aware of how responsive Congress is to voter sentiment when it comes to taxation. This part of your proposal - raising taxes on 60% of the population - is just not going to happen.

I agree with the points you have made, but I am a realist.

DanC: "What states have the greatest problem with the uninsured? Draw a line from California to Florida along the southern US border. With a blip for Oklahoma."

I agree that most states across the southern edge of the U.S. - CA, AZ, NM, TX, LA, MS, and FL but not AL - have the highest percentage of uninsured. But other states have non-elderly uninsured rates which exceed the national average of 17.2%:

AK - 18.9%
MO - 18.7%
NC - 19.5%
OR - 19.7%
NJ - 17.6%

Quite a few more have uninsured rates in the 14% to 17% range.

It's not just the immigrants who are uninsured.

"To be sure, this doesn't mean that being uninsured is not a problem but, contra Paul, it does mean that insurance companies would be willing to cover most of the uninsured at the same rates as the insured if the uninsured could or would pay those rates."

I'm not sure that I follow this. If the uninsured paid at the same rates as the insured is on coincidentally important IF the uninsured use health insurance at the same rate the the 60% doesn't it? I mean, if the 40% have medical costs five times the 60%, then it blows them out of the water.

So I'm not sure that what you've posited - or what I've understood - works.

Besides, as in auto insurance, when you have a wreck you are often canceled and here in Texas have to get from a last resort provider at wildly inflated costs, so that congruent 40% pool isn't "clean".

That should be David N -- I need to erase a cookie or something.

They actually call your medical costs...medical costs.


When is the last time a life insurance company defaulted? There's also re-insurance. I'd like to keep the government out of it for the simple reason that there's absolutely no evidence they can run a tighter ship, and much evidence to the contrary. Government involvement could entail enforcing certain reserve ratios, etc. I think it's appropriate for the government to produce rankings of all insurnace companies based on metrics of soundness or trustworthiness or number of complaints, and I believe many states already do.

The calculation I posted earlier was flawed, it's actaully better than that. The $320,000 per capita lifetime spending would include pre-deductible expenditures, so the NPV of the insurance payouts is even less. There's a lot of detail on the distribution of costs by age on that link I provided; I'll try to make use of some of it before I do anymore "back of the envelope" thinking.

David N: "You seem to be more certain of what Democrats will and won't do than you're entitled to be."

I'm not sure what you mean. I'm only explaining what Democrats have already shown they will and won't do. Democratic leaders in Congress killed taxation of employer-provided benefits three weeks ago. Democrats in Congress are scrambling right now to find "revenue" to pay for one of their "better" uses: health insurance for those currently uninsured. They've proven by their inaction that taxation of current individual insurance policies is of little concern to them.

DanC: "Do we contain costs. Or do we strive to insure everyone."

I'm not sure who this "we" is that you refer to. If you mean the government, then I say let the government control costs wherever it is paying the bills - Medicare and Medicaid - so that expenses do not exceed revenues.

As for the private world of medical care providers, insurors, and insurees - I say the "we" should leave that alone. Collectivism is not going to efficiently solve problems of scarcity. That's been proven throughout the 20th century.

Why strive to insure everyone? We have non-profit hospitals and clinics which right now, today, provide health care for those who cannot afford it.


You can purchase term life with level premiums.

David N: "I think we should find solutions first and deal with so-called "political realities" later."

Tilt at windmills if you must.

Including the government in any economic arrangement implies the inclusion of political realities. A solution to health care which ignores politics is no solution.

"That's not correct. 35 states have established high risk pools which force insurors to provide coverage to such persons."

Pennsylvania has a two year waiting list to get into the program.


Having read Krugman's post, I think you are a)either missing the point or b) trying to redefine the issue. Krugman is not talking about the uninsured per se`, he is discussing individuals that have health care needs and need coverage but can't get it or afford it. Therefore, Krugman appears to be discussing a subset of the uninsured population. So within the context of Krugman's argument, who cares if 60% of the uninsured are healthy. A cursory review of health care literature indicates that given the appropriate incentives insurance companies will practice adverse selection It seems to me that you missed the point on this one.

On the plus side, alex updated the entry. On the minus side, it was to link to Megan Mcardle who is also wrong.

This is basic stuff, kids


I don't think my grandmothers are out of the ordinary. Many old people die after bouts with chronic illnesses like they did. Either you or the other David wrote about the per capita medical spending over the course of a person's life, and that number is about what was spent on each of them in the last 5 years of their quite long lives, and neither of them lived in nursing homes of any kind.

The lifelong health insurance plan is also a favorite of mine for the very reason that it the only insurance mechanism that clearly define your cost parameters. Of course, the devil really is in the details since, for it to actually work, you can't force the plan to violate the actuararily sound caps on total payments unless you allow the plan to raise the premiums over time, and perhaps at unpredictable times and amounts.

That the uninsured are healthier than the insured is exactly what you'd expect given adverse-selection behavior on the part of buyers of non-group health plans.

The government can do whatever it wants to try and control health care costs but Im still skeptical. In fact its totally laughable. This is just another bad example of people getting caught up in the 'political' jet wash. Health care reform is a huge plank for the left in America. Their faithful have bought into it head long.

However, in the end, Americans are not exercising enough, they do not eat enough fruits and cruciferous vegetables. They eat way too many simple carbohydrates instead of complex carbs derived from whole grains. The amount of corn feed beef consumed by Americans is astronomical. In short, Americans have very bad diets and they want to live as long as possible. This fact coupled with American incomes being greater the rest of the world's, relatively speaking, means that health care will continue to be expensive. I dont care if we solve the adverse selection problem or health insurance companies all of the sudden started paying for any and all comers.

American eating and exercise habits have brought us to this world and health care isnt going to improve until lifestyles improve. All this talk about health care reform is a waste. Nothing will change the fact that we are a bergur and cheese loving society that doesnt exercise much and wants someone to pay for their health care.

Obama and his ilk would be much better off having fire sad chats on TV every evening asking the American people to please eat more fruits and veggies. Cheaper health care can only be achieved through through the mouths of Americans.

In fact, when I think of US mortality rates in comparison to the rest of the rich world, I am even more impressed with our current systems results. Could you imagine tasking Canadian, French, Italian, or UK health systems with the average American body? LOL

Putting everyone in a system backstopped by the government will only make the problem worse until government is forced to ration by means other than price.

And you like the present system? Have you ever been to Europe? Or outside the U.S.?

People tend to get covered through their employers. Employer coverage usually covers all employees. In this case, insurance companies can't choose who to cover. They can change pricing and payouts.
This statement is true only for employers covered under ERISA which mandates this, and in the states that prohibit underwriting and exclusion of preexisting conditions in group, or all policies.

For many small employers, their employees are subject to exclusions for preexisting conditions, or the employer is quoted terms that are prohibitive, or the policy is not renewed based on claims experience.

As many small businesses in real lines of business (ie, not in some internet software venture) are started by middle age business people who have a lot of experience from working in national and international corporation, and families. Any problems with health which leads to exclusions or high insurance premiums creates a real barrier to starting a small business. Many businessmen are very interested in starting a business, but without access to affordable health care for themselves and families, they stay with their big corporate employer because ERISA serves the same function as Medicare in solving the health care problem for about half the workers who might vote.


I think you're misreading the table (and forgetting your Bayes').

What you should be interested in is the question what is the probability of being uninsured given that you're unhealthy, vs the probability of being uninsured given that you're healthy.

If P(uninsured, given unhealthy) > P(unsinsured, given healthy) that would be at least a strong indicator of market failure (the unhealthy are finding it harder to get insurance).

Table 10 supports that view; the last column (at the bottom) shows that the unhealthy are siginficantly more likely to be uninsured than the healthy; 15% of those in excellent health are unsinured, 23% of those in good health are uninsured, 21% of those in fair/poor health are uninsured.

That looks to me like clear evidence of market failure.

Canadians eat just as badly as Americans and are way fatter than the French - yet they live longer than both Americans and the French. The Brits are actually fatter than Canadians, yet those two "socialist" health care systems seem to do just fine.

This is the result of health care rationing and long waiting times. If a Canadian goes to his doctor to die, he is sent how with instructions to exercise and eat better, and some medicine to take because their is a two year waiting list for the dying ward at the hospital. In Britain and the NHS, things are really bollixed up, and most people show up to die, but get tired of waiting and just go home, trying back every month or so, so on average they hit the NHS on a day when they have an opening to die after about two years.

In the US, you show up at the ER needing to die, and they rush you in and get your dying taken care of right away with absolutely no waiting.

That is why Americans live about two years shorter lives than Canadians and Brits - Americans aren't forced by rationing to wait to die.

Shorter Tabarrok: If 90% of the population are right-handed and 50% of them hold insurance, seeing 80% of the uninsured be right-handed shows (oops, "suggests") that insurances don't discriminate against left-handers. Black is white and P(A|B) ≡ P(B|A).

And that's the intelligent part of his post. Before he starts ignoring the little fact that ceteris paribus those who suffer from poor health will demand more healthcare than those in excellent health. (That's what the word "need" in "likely to need care" means. Need, when endowed with purchasing power, creates demand. Econ 1.) So not only doesn't he understand conditional probabilities, can't do the numbers (21% of those in poor health uninsured vs. 15% in the general population makes for a 40% difference), he also can't apply simple supply and demand to realize that absent major differences in purchasing power by health class (refuted in Table 15) the only explanation why we see significant less insurance among the poor/fair than in the general population is that insurers price them out of the market. Iow, they "try to avoid" them.


Ricardo: "At the top of every health care discussion in the U.S. should be the fact that the U.S. spends about 15% of GDP on health compared to 10% for most of Western Europe and has little to show for it."

The U.S. spends more for health care because per capita income is much higher in the U.S. than in Europe. U.S. consumers have more disposable income and choose - individually and collectively - to spend more for health care. U.S. consumers have elected to consume more elective treatments. They have chosen to pay for excess capacity in all areas of health care in order to reduce queueing. U.S. citizens have elected to provide more end of life care for elderly. U.S. citizens have elected to fund much greater levels of medical research.

ricardo: "maybe the reason why American mortality stats aren't much different from those of other Western European countries is that you are, in fact, wrong about American health practices compared to other countries"

We've debated this many times. Someone has previously shown that mortality rates for Japanese-Americans are actually better than for Japanese citizens; that European-Americans have mortality rates about identical to Europeans as a whole. Several factors account for America's slight lag in mortality rates vs Europe:

- the higher proportion of persons of African descent;
- the much greater incidence of violence in America;
- the higher levels of driving per capita, and the resulting higher traffic deaths.

I don't have time to provide statistics to back up these arguments. We've done this before.

I'm not sure the data you cite support the conclusion you reach.

If insurance companies do avoid covering people who are "likely to need care," this suggests that the uninsured are unhealthy. But 60% of the uninsured are in excellent health (Table 10) (In fact, overall the uninsured are only slightly less healthy than the insured).

Health status of the non-elderly (from Table 10)
Excellent/Very Good:	181.7 million	69.5%
Good:			 57.8 million	22.1%	
Fair/Poor:		 21.9 million	 8.4%	
			216.5 million
Health status of the non-elderly uninsured (from Table 10)
Excellent/Very Good:	 27.1 million	60.2%
Good:			 13.2 million	29.4%
Fair/Poor:		  4.6 million	10.3%
			 44.9 million

The first problem is that the non-elderly includes both insured and uninsured individuals. It makes more sense to compare the elderly insured with the elderly uninsured.

Health status of non-elderly insured individuals (computed from Table 10)
Excellent/Very Good:	154.6 million	71.4%
Good:			 44.6 million	20.6%	
Fair/Poor:		 17.3 million	 8.0%	
			216.5 million

Whether you consider the uninsured "only slightly less healthy", based on this data, is a matter of opinion. But there is a far more serious problem with this comparison. Adverse selection and refusal to insure the sick does not occur in company health plans or Medicaid; it only occurs with private individual health insurance. So we should look at the health status of non-elderly individuals with private individual health insurance.

Health status of non-elderly individuals with private individual health insurance (computed from Table 1)
Excellent/Very Good	11.0837 million	51.7%
Good			 9.537  million 44.5%
Fair/Poor		 0.8103 million  3.8%
total			21.4310 million

Compared to the non-elderly uninsured, we see a smaller percentage of people in excellent or very good health (51.7% versus 60.2%), probably because of adverse selection. And we see a far smaller percentage of people in fair or poor health (3.8% versus 10.3%), probably because insurers refuse to insure them.

Oh yeah and I wish youguys had the pseudo word captchas instead of boring random letter numbers then you could see the always intersesting word verification definitions.

And another thought:

I read (here possibly) that a blogger should care more for quantity over quality, yet in blogs that are co-wrote there may be a need for a slight change to that. Tyler is a smart guy, but sometimes I think there is some absolute dreck he happens to let spew forth from his fingertips, which may not be a bad thing because it is still tolerable dreck compared to most of the blogosphere, but I can't miss checking this page because I know that Alex will always nail down something in my head or poke some holes in it. Especially when he writes about organs, that stuff almost is gold.

No disrespect to Tyler, who keeps this thing fresh and drives the interest, and when Tyler is on top form I don't think there is but a handful of bloggers out there who could compete. Generally what I am getting at is keep up the good work and I may just learn a little more yet!

I have not read Krugman enough to say that he always preaches the truthy liberal preconceptions to his choir, but I haven't seen otherwise. Keep hammering him on these points Alex. Bravo.

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