Monday, January 07, 2008

More Clarity to the "47 million Uninsured" Number

It was interesting to read a more recent breakdown (subscription required) of the 47 million uninsured number I discussed previously that is repeatedly used by the presidential candidates to support their desire for insurance mandates. It comes from senior partners at Bain and Company in today's opinion column of the Wall Street Journal:
Census Bureau data reveal that the uninsured are actually the kind of demographic that consumer product companies dream about. A surprising 85% of the nation's uninsured are currently employed and nearly all have worked in the past year (emphasis mine). They are young -- almost half are between the ages of 18 and 34 -- and nearly three-quarters of the uninsured describe their health as "excellent" or "very good." More than two-thirds have at least some college education and about half earn middle-class incomes.

Second, insurers no longer can afford to ignore the uninsured market. Their core business -- selling group plans to large employers -- is stagnant. A Bain & Company analysis of the health-insurance sector shows that total commercial health-insurance enrollment has been flat at around 174 million people since 2001. In response to rising costs, employers have steadily pared back benefits, and the percent of businesses offering health insurance has fallen to 60% last year from 66% in 1999. Since the 2001 recession, the number of contractors, part-timers and small-business employees has grown two to six times faster than the economy overall. In contrast, traditional workers -- the full-time company employees that provide the insurance companies' bread and butter -- have declined 0.6%. As a result, profit pools in corporate-funded health plans are shrinking.

For insurers, this means that their greatest source of future growth is selling policies to individuals -- not corporations.
So it seems, most have chosen not to have insurance because they thought they were at low risk of needing it(who knew?). Better stop those people from thinking, dammit!

So if you're wondering who's direct-to-consumer ads we'll be seeing next alongside the pharmaceutical ads with the evening news, look no further than your friendly neighborhood national insurer.


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