I first must poke fun at myself just a bit. I have not had any good critical comments on this site lately, and I guess I am missing the thrill of a good debate. So I have created for myself somewhat of a false debate here. Yes, I’m inventing an adversary, and I have chosen for myself a well-recognized, distinguished Harvard economist. I’m a bit out-gunned, but lucky for me he probably won’t respond.
So let’s get down to it…
Mankiw’s first statement regarding infant mortality and life expectancy is a valid one up to a point. The U.S. has a high homicide rate, and I (and you) will just have to trust him on the life expectancy thing (but I would like to see more of the research as I would have guessed that homicide and accidents could only account for a portion of the life expectancy discrepancy). The infant mortality rate is a troubling measure, but a good one as well. It is troubling for reasons that he mentions, but it is a good measure because this one measure captures many qualities of a health care system. It speaks to prenatal care (my guess is that Canada does this better), nursing, technology usage, doctors’ expertise, etc. So his point about high teenage pregnancy rates is true, but it is also true that the U.S. could improve our infant mortality rate numbers by providing universal prenatal care without obstacles. Canada does that.
His second statement was that the often quoted 47 million uninsured number over exaggerates the problem. I would say that it probably does, but not to the extent that Mankiw claims. Looking at the inverse numbers that Mankiw refers to, the U.S. Census Bureau states that there are over 33 million U.S. citizens without health insurance. And the percent of U.S citizens without health insurance grew from 12.8% in 2005 to 13.2% in 2006. So baseline-we have a problem and it is growing.
Second, of the 10 million that are not U.S. citizens the U.S. Census Bureau does not distinguish between legal and illegal. Legality is a big difference to many, but further, Mankiw assumes that illegal immigrants should not have health insurance of any form. That is a different policy debate, but it should not be assumed that we as a country are not better off by not providing care for illegal immigrants.
Third, he argues that 18 million (closer to 16 million actually) of the uninsured have household incomes over $50,000 so they of course can afford insurance. Well, let’s do some math. Let’s say a family of three makes just over $50,000/year (well, be generous – no tax burden). They spend $12,000 on housing leaving them with $38,000. A family policy in NY State in the individual market can run up to and over $24,000 (Aetna Health – $2,444/month in August 2007). So they have $14,000 left for everything else. Is that affordable?
Lastly, just because someone could have insurance and does not for whatever reason, does not mean that there are no longer negative effects on society as a whole. So if a person qualifies for Medicaid but is not enrolled that decision will still have negative consequences on society. Or if a person is young and chooses that the costs outweigh the benefit that decision will still have negative consequences for society. Or if an illegal immigrant cannot get health care it will still have negative effects on society. We cannot ignore the negative consequences to society as a whole from having 47 million people uninsured.
Mankiw’s third argument about the rising health care costs not really being a problem has validity, but he misses a huge point. Yes, we have wealth and we have tremendous health care technology advances that drive health care costs upward and upward. Spending more and more money on health care is not by itself the problem – “it is a symptom of success.” The problem is if you want to insure the 47 million uninsured (and growing). The rising health costs now present a formidable challenge. It takes over $6,000 to provide health care to each person. The more costs go up the more redistribution of wealth is needed, and the more politically unrealistic universal health care becomes. So if we as a nation are fine with a large number of people being without health insurance then the growing costs are not actually a problem, but when your employer drops your coverage then you will see a problem.