Paying a Premium : The Added Cost of Care for the Uninsured

This study lends empiric support to the idea that the US needs a Standardized National Health Policy. The reality is, we the taxpayers , either by taxes or higher premiums, are already paying for Healthcare for the uninsured and the Underinsured in this country. Insured taxpayers fund 65% of the cost of healthcare for those with who are un- or underinsured. We are paying for this in the least economically feasible manner. Those without healthcare are sicker and have higher health costs when they finally do seek medical attention, than people with health coverage. It makes economic sense for the taxpayer in this country to spend our tax dollar instead on a healthplan that ensures access for the uninsured, thereby lower our costs as taxpayers and insureds. This is not about 'warm and fuzzy' or 'giveaways'. We're are giving this away anyway, let's develop a strategy that makes economic sense for us to do so....Raising minimum wage is another angle, another tool to decreasing the cost of taxpayer funded systems.
Click the link in the Main title for the entire report with the numbers, then research cost and savings of a National health program.
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A R E P O R T B Y
Families USA

From the Study...

What we have shown in this study is that we are all affected by the presence of large numbers of Americans without health insurance.
Unless we find realistic ways to help the uninsured get coverage, the problem can be expected to worsen—for the uninsured and the insured alike...


This study quantifies, for the first time, the dollar impact on private health insurance premiums when doctors and hospitals provide health care to uninsured people. In 2005, premium costs for family health insurance coverage provided by private employers will include an extra $922 in premiums due to the cost of care for the uninsured; premiums for individual coverage will
cost an extra $341. ( see Tables 1 & 2, pgs 4-5).

Nearly 48 million Americans will be uninsured for the entire year in 2005.
What happens when some of these 48 million Americans get sick? Research has
shown that the uninsured often put off getting care for health problems—or
forgo care altogether.1 When the symptoms can no longer be ignored, the
uninsured do see doctors and go to hospitals. Without insurance to pay the
tab, the uninsured struggle to pay as much as they can: More than one-third
(35 percent) of the total cost of health care services provided to people without
health insurance is paid out-of-pocket by the uninsured themselves...

Who Are the Uninsured?

Contrary to popular belief, the overwhelming majority of uninsured people
are workers or members of a family in which at least one member works. Researchers
have estimated that four in five individuals without health insurance
are employed or in a family with an employed adult.
There are several reasons why people with jobs lack health insurance. First,
not all jobs offer health insurance benefits. The likelihood that an employer
offers health benefits to its workers varies considerably. Small employers,
employers with low-wage workers, and employers with older workers are all
less likely to be able to afford to offer health coverage to their employees. (small business may have an understandable impediment to offering health coverage , never completely addressed in this study, is the cost we bear because of larger corporations that avoid offering coverage to significant numbers of their employees at all... that is for another post--rw)
Second, some people who are offered coverage by their employer do not sign
up for that coverage because they cannot afford to pay the portion of the
premium that is not paid by their employer. In 2004, full-time workers receiving employer-sponsored health insurance were asked to pay, on average, $564 per year in premiums for individual coverage and $2,664 per year in premiums for family coverage. Paying the employee share of the premium is particularly difficult for low-wage workers. Recent research from California shows that a worker’s share of premiums can account for as much as 46 percent
of full-time wages for minimum-wage workers...


Even after making tremendous personal sacrifices, the contributions made by uninsured people
toward their medical bills cover an estimated 35 percent of the cost of care they receive from doctors and hospitals.

Who Pays for Health Care for the Uninsured?

To develop an estimate of the cost of care that the uninsured receive
and cannot afford to pay (“uncompensated care”), our study adjusts the total
charges to the uninsured to reflect what the privately insured would pay, on
average, in the state for the same health care services. We do this in order
to avoid inappropriately inflating the value of the health care services and to
ensure that our estimate of what providers will need to recoup is a conservative
one. Research has shown that uninsured patients are charged much more than
insurance companies are charged for the same services.

Nationally, we estimate that about $43.1 billion in health care for which
the uninsured cannot afford to pay will be provided by hospitals and doctors in
2005. In 2010, about $60.4 billion in uncompensated care will be provided
(seeTable 3).
(These estimates do not include uncompensated care provided to insured
people, who may be unable to pay because they face high deductibles,
high copayments, uncovered services, and other out-of-pocket costs that
people with insurance are sometimes unable to pay.)


These costs are covered by the following three sources:
1. non-patient, non-government revenue sources, including philanthropy;
2. federal, state, and local programs that partially reimburse providers
for the cost of care to the uninsured; and
3. higher premiums for people with private health insurance.


...data from the Medical Expenditure Panel Survey, philanthropy is estimated to cover only 1 to 2 percent...

The combined contribution of federal, state, and local programs that partially
reimburse providers for the cost of care to the uninsured accounts for approximately
one-third of the uncompensated care provided by both hospitals and
physicians nationally (see Appendix Tables 1 and 2). This comes to 33 percent
in 2005 and 29 percent in 2010....

But that leaves two-thirds of the cost of uncompensated care unpaid—a
gap that is filled by patients with private health insurance. We estimate that
almost $29 billion worth of unpaid care received by the uninsured in 2005
and more than $43 billion in 2010 will be financed by higher premiums for
privately insured patients.


As a result, the cost of private insurance will be, on average in the nation, 8.5 percent higher in 2005 than it would be if everyone in the United States were to have health insurance. This translates into $341 more for the average individual premium and $922 more for the average
family premium (see Table 1 and Appendix Table 1). In 2010, the annual impact will be 8.7 percent...


Given that most health care providers are not driven to bankruptcy and our health care system survives from year to year, we can say with certainty that those with health insurance finance the residual two-thirds of the cost of care for the uninsured provided by a state’s hospitals and doctors. Ironically, this increases the cost of health insurance and results in fewer people who can afford insurance—a vicious circle.