Rice University
Rice Magazine| The Magazine of Rice University | No. 3 | 2009

A (Health Insurance) Stitch in Time Might Save ...

Extending health insurance coverage to all children in the United States would be relatively inexpensive and would yield economic benefits that are greater than the costs, according to new research conducted at the James A. Baker III Institute for Public Policy.

The researchers — Vivian Ho, chair in health economics at the Baker Institute, professor of economics at Rice and associate professor of medicine at Baylor College of Medicine, and Marah

Short, senior staff researcher in health economics at the Baker Institute — based their findings on recent studies that examined evidence regarding the economic impact of failing to insure all children in the U.S. Ho and Short compared children’s health care in the U.S. to the care provided in other industrialized countries and found that, despite the highest per-capita spending on health care among 30 member countries of the Organisation for Economic Co-operation and Development, the U.S. ranks third-highest in the percentage of the population lacking health insurance, with one in seven people uninsured. They estimate the number of uninsured children in the U.S. to be more than 8 million.

Studies clearly indicate that this lack of coverage leads to “lower access to medical care and lower use of health care services," the researchers wrote in their report, titled, “The Economic Impact of Uninsured Children on America." It may even be reflected, they argued, in relatively high child morbidity rates in the U.S. Moreover, lack of health care for children has long-term effects — some of them economic — as those children become adults.

Children who receive better health care and enjoy better health are generally more productive as adults, the researchers said. The cost incurred by providing universal coverage to children “will be offset by the increased value of additional life years and improved health-related quality of life gained from improved health care," they wrote. “From a societal perspective, universal coverage for children appears to be cost-saving."

The report concludes that there is compelling evidence that covering all children in the United States with health insurance will yield not only immediate improvements in the health of children, but also long-term returns of greater health and productivity in adulthood. “The up-front incremental costs of universal health insurance coverage for children are relatively modest," said Ho, “and they will be offset by the value of increased health capital gained in the long term."