'What Matters for Health: Insurance is Less Important Than You Think'

 

The Paper

This paper argues that expanding public health insurance has minimal impact on health outcomes and recommends focusing on healthy behaviors and medical innovation for more effective improvements.

Executive Summary

Why We Did This Study

For decades, health policy in the United States has focused on expanding health insurance coverage at enormous cost to taxpayers. Policymakers assumed that coverage would increase access to care, which would improve health. In fact, there is little evidence that expanded government health insurance programs improve most people’s health. Multiple studies show that public insurance expansions increase the amount of health care used. But they generally improve health by much less than is commonly believed. Policymakers need to understand why expanding insurance coverage has had so little impact on health and to focus their efforts on proposals that will successfully improve Americans’ health.

What We Found

Most studies claiming a health benefit for insurance are observational. They may show a correlation between insurance and health outcomes, but they do not establish causation. Observational studies are prone to bias and confounding by unobserved differences between the insured and the uninsured. Evidence from randomized, controlled experiments that avoid these problems indicates that insurance produces little, if any, health benefits. The primary benefits of insurance are to improve people’s sense of well-being, mental health, and
financial security.

There are multiple reasons why insurance coverage has so little effect on health. Public insurance expansions such as those within the Affordable Care Act (ACA) often substitute public insurance for private insurance or replace previously uncompensated care with care that is covered by insurance. In addition, many government insurance programs provide limited access to services and focus on low-benefit care. Health care in general has only a modest impact on health: Estimates suggest it contributes no more than 10-20 percent to determining health outcomes. Some care may actually decrease health by exposing patients to medical errors or to over-diagnoses and misdiagnoses. We conclude that individuals’ health behaviors and medical innovation are far more important contributors to health than insurance coverage.

Why It Matters

Life expectancy gains in the United States have stagnated and mortality rates for the major medical causes of death have continued to rise even as public insurance coverage has expanded. Congress is considering extending those coverage programs. The evidence strongly indicates that this would not be a cost-effective strategy for improving Americans’ health.

Policy Suggestions

Instead of continuing to pursue costly expansions of public health insurance and subsidies to insurers that do little to improve health, policymakers should focus on more effective initiatives such as promoting healthy behaviors and increasing medical innovation.

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https://paragoninstitute.org/public-health/what-matters-for-health-insurance-is-less-important-than-you-think/