Can having health coverage save lives? A new study suggests that it can.
A National Bureau of Economic Research paper examined the effect of letters the IRS sent out to 3.9 million taxpayers who had previously paid a tax penalty for not having health insurance coverage under the Affordable Care Act, concluding that the warning reduced deaths among middle-aged adults.
The tax penalty was the ObamaCare individual mandate, which aimed to encourage individuals to obtain health insurance.
In 2017, the tax agency sent out informational letters about both the penalty and coverage options to 3.9 million households -- out of 4.5 million who were eligible. Hundreds of thousands were left out because of budgetary constraints, which naturally created trial and control groups for researchers to study.
The first effect the letters had was increasing coverage.
Each letter sent out by the IRS increased coverage (through the individual marketplace and Medicaid take-up) by one additional year per 87 letters sent, a trio of Treasury Department economists found.
The second effect was a decline in mortality.
Researchers found that in the two years after receiving the IRS letter, the rate of mortality among previously uninsured people between the ages of 45 and 64 was lower compared to those who were not sent a letter. There was one fewer death per every 1,648 individuals flagged by the IRS, and, overall, throughout the two years after the letters were sent there was a 12 percentage point decline in mortality.
About 700 premature deaths may have been prevented.
"Our results provide evidence that the intervention increased the likelihood of taxpayers obtaining coverage, and that this additional coverage reduced middle-age mortality during the two years following the intervention," researchers wrote. "In addition to reducing adverse selection (their typical rationale), outreach efforts of the type we study may yield substantial health benefits."
The study was first reported by The New York Times.
The Tax Cuts and Jobs Act eliminated the individual mandate, though some states have imposed legislation that mirrors it. There are a number of ways lawmakers aim to incentivize health coverage, including the exclusion for employer-sponsored health insurance.
Health care reform is a hot topic as the 2020 election approaches. Democrats have debated amongst themselves about the best way to make coverage more affordable, with the progressive wing of the party – including independent Vermont Sen. Bernie Sanders and Massachusetts Sen. Elizabeth Warren – advocating for a full transition to a government-run, single-payer system whereby every person would be awarded coverage. Others in the party, however, support a Medicare-for-those-who-want-it opt-in choice that would allow people to keep their private coverage.
The number of uninsured Americans rose for the first time in 10 years in 2018, by about 2 million people, according to data from the U.S. Census Bureau. Overall, about 8.5 percent of the U.S. population did not have insurance for the entirety of last year.