Americans who lack health insurance for any part of 2008 will spend $30 billion out of pocket for health services and receive $56 billion in uncompensated care while uninsured. Government programs pay for about three-quarters, or roughly $43 billion, of the uncompensated care bill, researchers report in today's Web Exclusive edition of Health Affairs. The researchers define uncompensated care as care received but not paid for fully by the uninsured or by a health insurer.
Although covering the uninsured will undoubtedly cost the federal government more, some of the costs could be offset by redirecting the nearly $43 billion that governments currently spend to subsidize the uninsured's uncompensated care, say researchers Jack Hadley of George Mason University and John Holahan, Teresa Coughlin, and Dawn Miller of the Urban Institute. This spending includes roughly $18 billion in special payments to hospitals by Medicare and Medicaid; $15 billion in tax appropriations and indigent care programs by state and local governments; and almost $10 billion in spending by the Veterans Health Administration, the Indian Health Service, community health centers, and similar direct care programs. However, the authors note that redistributing these dollars is unlikely unless universal coverage is achieved.
"From society's perspective, covering the uninsured is still a good investment. Failure to act in the near term will only make it more expensive to cover the uninsured in the future, while adding to the amount of lost productivity from not insuring all Americans," said Hadley, a professor and senior health services researcher at George Mason University and the study's lead author.
Compared to people who have full-year private health care coverage, people who are uninsured for a full year receive less than half as much care as the insured but pay a larger share out of pocket, the authors report. Someone who is uninsured all year pays 35 percent ($583) out of pocket toward their average annual medical costs of $1,686 per person. In contrast, annual medical costs of the privately insured average $3,915, with $681, or 17 percent, paid out of pocket.
"The uninsured receive a lot less care than the insured, and they pay a greater percentage of it out of pocket. Contrary to popular myth, they are not all free riders," Hadley said.