July 07, 2002

Why the Decline in Health Insurance Coverage?

The continued decline in the share of Americans with health insurance coverage places additional stress on our health care financing system. Sometimes those without health insurance get no or get substandard treatment. Sometimes those without health insurance get adequate or excellent-quality catastrophic treatment--but the treatment is paid for by somebody else. Such cost-shifting further increases the cost of insurance, and reduces coverage. The fear is that at some point large chunks of the financing system will enter an adverse-selection death-spiral as each wave of price increases generates a large reduction in the pool of those paying for insurance and a further wave of price increases. And the derangement of the health-care financing system leads to a significant deterioriation in the quality of care provided.

But, fortunately, we aren't there yet.

However, we are getting closer. Here David Cutler tracks the decline in health insurance coverage in the 1990s.

Employee Costs and the Decline in Health Insurance Coverage

David M. Cutler
NBER Working Paper No.w9036
Issued in July 2002
---- Abstract Posted by DeLong at July 7, 2002 07:51 PM

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