National Bureau of Economic Research
August 2004
How Much Might Universal Health Insurance Reduce Socioeconomic Disparities
in Health? A Comparison of the US and Canada
By Sandra L. Decker and Dahlia K. Remler
Abstract
A strong association between lower socioeconomic status (SES) and worse health– the SES-health gradient– has been documented in many countries, but little work has compared the size of the gradient across countries. We compare the size of the income gradient in self-reported health in the US and Canada. We find that being below median income raises the likelihood that a middle aged person is in poor or fair health by about 15 percentage points in the U.S., compared to less than 8 percentage points in Canada. We also find that the 7 percentage point gradient difference between the two countries is reduced by about 4 percentage points after age 65, the age at which the virtually all U.S. citizens receive basic health insurance through Medicare. Income disparities in the probability that an individual lacks a usual source of care are also significantly larger in the US than in Canada before the age of 65, but about the same after 65. Our results are therefore consistent with the availability of universal health insurance in the U.S, or at least some other difference that occurs around the age of 65 in one country but not the other, narrowing SES differences in health between the US and Canada.
From the Conclusions and Discussion
While we cannot definitively say that universal health insurance causes all of the 4 percentage point gap shrinkage at age 65, our results, particularly our access results, are consistent with such a causal role. More work comparing adients and their variation with age across countries whose institutions differ can further help disentangle the causes of the gradient. Once the causes of the gradient are understood, policies can be more effectively targeted. In particular, we could learn just how much inequality reduction universal health insurance would buy us in the US. Although far from definitive, our present results suggest that it might buy us quite a bit.
http://papers.nber.org/papers/W10715 (copyright by the authors)
Comment: This important paper confirms the correlation between universal health insurance and lower socioeconomic disparities in health, even though
a causal relationship has not been irrefutably established. But what else might explain why, in the United States, at age 65 when Medicare coverage begins, there is a dramatic reduction in socioeconomic health disparities? Might it be because our fragmented system of funding care eliminates some of the infirm by age 65?
I’m betting on the fact that national health insurance does, in fact, actually reduce socioeconomic disparities in health. Regardless, because of the positive correlation we don’t need to wait for more studies. The cumulative body of health policy literature confirms that the benefits of universal health insurance vastly outweigh the negligible disadvantages. Failure to proceed with reform now would constitute an egregious ethical lapse on the part of our policymakers.