This started as a comment to Bob’s post below - “Dying Poor” - but my comment began to run long and I think works better as a regular post.
The NBER Working Paper (scroll to link "Were they Prepared for Retirement?") finds that 46% of people die with less than $10,000 in assets. We already know that about 50% of taxpayers have so little income that they pay no income tax. So is the NBER Paper helpful or even surprising information? I say no. In fact, I think it misses the point. Here’s what I think is the point.
Most long-term poor people have no significant income or assets before age 65; the same is true after age 65; and the same is true when they die.
OK then, what would be helpful to the long-term poor? I think a wider acceptance of the things one must do to avoid poverty in the first place, would be helpful. These things are easier said than done, but they are no mystery. Search any variant of "how not to be poor" and you will find them. For example, here is some extremely useful, fundamental advice:
"Avoiding long-term poverty is not rocket science. First, graduate from high school. Second, get married before you have children, and stay married. Third, work at any kind of job, even one that starts out paying the minimum wage. And, finally, avoid engaging in criminal behavior. If you graduate from high school today with a B or C average, in most places in our country there's a low-cost or financially assisted post-high-school education program available to increase your skills."
Why are such simple ideas ignored? I think because (1) the ideas require a quality that has become uncomfortable for many modern Americans--personal responsibility (2) the ideas don't fit the popular notion that in most cases government assistance is necessary for most poor people, and (3) the ideas are not intellectualized in some professorial research paper.
But even a professorial research paper can fail to be useful by missing the point, as I think this NBER Working Paper does.
This brings us to the connection with insurance - at least conceptually. That concept is the failure to be useful by missing the point.
Our country's health policy leadership - with notable exceptions - has typically missed the point by continually failing to distinguish medical insurance from medical care. Somehow, it's all "healthcare" to them. But the two are very different, and the difference matters.
Medical insurance is expensive because medical care is expensive. The cost of medical insurance is rising because the cost of medical care is rising. The cost of medical care is clearly the more fundamental problem. But our health policy leadership insists on “solving” that problem with federal subsidies – that is, with insurance.
Our leadership has missed the point about financing medical care. They misdiagnose the problem and they mislead the rest of us. This is no way to lead a nation and it’s no way to solve the problem. America’s inefficient and highly expensive medical care system over the past 50 years is ample proof of this. Obamacare is just another highly-expensive non-solution, born of missing the point.