Morning Must-Read: Austin Frakt: The Cost-Benefit of Universal Coverage

Austin Frakt: The cost-benefit of universal coverage: “Michael Cannon…. ‘The state of the literature on the costs of universal coverage is worse still…

“I am aware of only one study that has even attempted to measure some costs of universal coverage and compare them to some of the benefits…. So how is it that despite this dearth of evidence, a vocal minority of the U.S. population is utterly and completely convinced that universal coverage is net beneficial?… Why do they hold this prior belief?’…. John Nyman estimates that if we value a year of life at $100,000… and if health insurance leads to a 25% reduction in mortality (which strikes me as high in light of recent work), then people are better off by $2,100 per year with insurance…. Kenneth Arrow… argued that health insurance is welfare improving…. Wilhelmine Miller and colleagues find that the gains in health from covering the uninsured to be valued at $65-$130 billion annually with costs estimated to be $34-$69 billion…. Peter Muennig, Peter Franks, and Marthe Gold calculated that health insurance yielded a quality-adjusted life year (QALY) for a non-elderly American at a cost of $35,000… supplementing Medicare with more generous coverage produced a QALY for $24,000…. McClellan and Skinner… estimate that for individuals in the bottom two-thirds of the income distribution, Medicare provides substantially more value than it costs…. One cannot credibly say there has been no consideration of the benefits and costs of coverage expansion…. There’s yet another point of view to consider. The work of David Cutler shows that medical care is overwhelmingly worth its cost…. Let us keep in mind, however, that even if health insurance of some type is worth its cost, that alone doesn’t imply universal coverage is… the most cost-effective policy we could implement now…