The Kids Are Cheap

Health care expenditures are now 47% lower for uninsured children than for insured children, but that is because uninsured children are less likely receive needed medical, dental, or other care, Ho and Short write.

A lack of health insurance for children leads to inferior health, a higher rate of avoidable hospitalization, and a higher childhood mortality rate, the researchers write.

“The literature suggests that many uninsured children are healthy, and that insurance premiums in general should be much lower for children,” Ho says. “However, because there are a small fraction of children who are quite ill, executives and agents should hope that the government introduces additional support to cover the costs of chronically ill children.”

The health insurance industry must prepare for the possibility that the federal government will introduce a public insurance program, Ho says.

“If so, many privately insured children may be shifted by their parents into the public alternative,” Ho says. “Private companies will be forced to be more creative in developing competitive products, such as those that offer quicker and faster access to urgent care, more preventive medicine, and a wider network of physicians and hospitals.”