Research has clearly demonstrated that private insurance provides better access to health care than its public counterparts. Research articles, both new and old, however, indicate that the current structure of public insurance coverage such as Medicaid crowds out private health insurance.
Crowding happens in one of several ways: 1. Individuals or families choose to enroll in a public program when they have access to one even if they can afford private coverage because it’s cheaper, 2. Individuals or families choose to stay on public insurance when private coverage is an option, or 3. Employers induce crowd out by forcing employees to enroll on a public option so that the company doesn’t have to pay for private insurance.
An economist from MIT has projected that as many as six out of every ten individuals who enroll in Medicaid (or similar public insurance plans) would otherwise have enrolled in private coverage if the public option weren’t available. In other words, the government pays for ten people, of which, only four need to be covered… Doesn’t exactly sound like a deal for taxpayers.
Another MIT scientist found that this same problem of crowding out private insurance is true for long-term care (LTC) which is the biggest cost contributor for Medicaid. It was shown in her research that, “at least two-thirds of the wealth distribution still would not want to buy comprehensive (private) insurance given the current structure of Medicaid” even though they can afford private LTC.
The current perverse structure of public insurance encourages individuals, families and employers to enroll in government funded public insurance instead of superior and affordable private coverage, worsening the system and care provided for everyone.
