The Uninsured and Static vs. Dynamic Assumptions

    Although 70% of insured Americans rate their health care arrangements good or excellent, radical reform of health care is supposedly necessary because there are 45.7 million uninsured. That number is, however, a "snapshot" of a nation in which more than 20 million working Americans change jobs every year. Many of them are briefly uninsured between jobs. If all the uninsured were assembled for a group photograph, and six months later the then-uninsured were assembled for another photograph, about half the people in the photos would be different.

    ~George Will

    MP: Many of those discussing the "problems" of income, wealth or wage inequality often must be troubled because they are making the underlying assumption that individuals and households in the U.S. are permanently stuck in a certain income or wealth quintile (bottom or top) or income percent (top or bottom 10%), without acknowledging the dynamic movements up and down the income and wealth quintiles over time. Those who are troubled by the 45.7 million insured Americans are probably making a similar flawed, underlying assumption about the uninsured: that those individuals or households insured in a certain year remained permanently insured, and those individuals or households who are uninsured in a certain year remain permanently uninsured with no possibility of ever getting insurance without government intervention, with no interaction between the two groups.

    As George Will reminds us, the "uninsured" are often temporarily, not permanently uninsured, and the composition of the 45.7 million uninsured changes all the time, i.e. it's not like a private club closed to new members.

    The unrealistic assumption of static group compositions over time (for income, wealth, or the uninsured, wages, etc.), and a rejection of the more realistic assumption of dynamic group changes, generally and inevitably leads to one policy conclusion: government intervention. Or at the very least, the assumption of static group compositions strengthens the case for government intervention and the assumption of dynamic group compositions weakens the case for government intervention.

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The Uninsured and Static vs. Dynamic Assumptions


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https://manufacturing-holdings.blogspot.com/2009/06/uninsured-and-static-vs-dynamic.html


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