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Bad reporting on the uninsured

Jane Zhang reports on the growing number of uninsured government contract workers in today's WSJ. Unfortunately, she hangs the story on the case of a 44 year old, obese woman with MS. The woman, you find out at the end of this sad story, was working for a blind contractor as a food service worker earning $7/hour. She worked approximately 2 years before being diagnosed with MS and had no health insurance.

Under the federal Randolph-Sheppard Act, blind vendors get priority in winning certain federal contracts. In an illustration of the thicket that contract workers face, there is disagreement over what benefits blind vendors who participate in a government program that gives them preferences, are required to offer employees. The Labor Department says blind vendors must comply with the Service Contract Act and provide benefits. But the Education Department, which administers the Randolph-Sheppard program in conjunction with states, says that is decided on a case-by-case basis. The District of Columbia administrator of the program says the blind vendors aren't required to provide benefits.

Zhang builds her story of uninsured contract workers on a case where we find out (at the end) the woman gets full disability from Social Security, Medicare, and $19,000 worth of free drugs a year from the drug company. It's a matter of conjecture (one doctor's) that insurance could have done anything about the MS.

What Zhang points out, but barely, is that contract workers can receive a cash equivalent of $3.16 an hour to buy their benefits according to the McNamara-O'Hara 1965 law which covers private contractors. So what's the gripe? Well, most federal employees have outstanding perks and $5,587 (average) apparently isn't enough to purchase what they would get as full government employees. But the big problem as I see it is the workers, who are often at the low end wage scale, don't use the cash bonus to buy health insurance--they use it for rent, or clothing, or cigarettes and beer. Who knows. But given the choice, they choose not to buy health insurance. There are on-going investigations to catch and punish contractors who don't abide by the law.

There were 650 investigations of contractors by the Labor Dept in 2007, and I assume something triggered the investigation. If there are 5.4 million contract workers, how many are not getting either the insurance or the cash benefit to buy insurance? She uses only anecdotes. There's no information on which is what. This may be a serious problem--but based on the flimsy evidence she has reported, we'll need to look elsewhere for the answers.

When we find out why people who can buy health insurance either privately or through their employer but don't, then maybe we're getting somewhere. It's odd that there isn't a law as there is for car insurance putting the responsibility on the worker.