The average family with health insurance shells out an extra $1,000 a year in premiums to pay for health care for the uninsured, a new report finds.
And the average individual with private coverage pays an extra $370 a year because of the cost-shifting, which happens when someone without medical insurance gets care at an emergency room or elsewhere and then doesn’t pay, according to advocacy group Families USA.
Aetna Inc. CEO Ronald A. Williams is scheduled to appear at a Families USA news conference today about the report. Aetna was not involved in writing or funding the report.
Families USA said the findings — which it calls a “hidden tax” — support its goal of extending coverage to all the 50 million Americans who are now uninsured. Congress and the Obama administration are working on a plan to do that.
Families USA contracted with independent actuarial consulting firm Milliman Inc. to analyze federal data to produce the findings.
“As more people join the ranks of the uninsured, the hidden health tax is growing,” said Ron Pollack, Families USA executive director. “That tax hits America’s businesses and insured families hard in the pocketbook, and they therefore have a clear financial stake in expanding health care coverage.”
The report found that, in 2008, uninsured people received $116 billion in health care from hospitals, doctors and other providers. The uninsured paid 37 percent of that amount out of their own pockets, and government programs and charities covered another 26 percent.
That left about $43 billion unpaid, and that sum made its way into premiums charged by private insurance companies to businesses and individuals, the report said.
The major government insurance programs — Medicare for the elderly and Medicaid for the poor — are structured in a way that doesn’t easily allow payments to insurers to adjust upward. And somebody has to pay.
Williams gave the example of a local community hospital that provides care to someone without insurance who arrives at the emergency room. When it’s not paid for, the hospital has to raise its rates to insurance companies, and they pass that on in higher premiums, Williams said.
“Our members then say, ‘Well, why is health insurance so expensive?'” Williams said in an interview. “And the answer is because you’re paying for your own care as well as for the care of some of the uninsured in the community.” (AP)
Reader response:
“It is a known reality that retail outlets add cost to merchandice to offset the cost of stolen goods within their stores. The money either has to be absorbed by the retail outlet or passed to consumers. Similiarly, doctors and hospitals can either absorb the cost of services not paid for because of the uninsured or pass that cost to those who are paying for the services, typically the insured. I wouldn’t call this a “hidden tax”; its just economics. What’s not mentioned in this study is the effect of the uninsured who attempt to pay for health care using credit cards but later declare bankrupcy. Furthermore, a group that is rarely mentioned are the under-insured, those who have insurance but don’t have the coverage to pay for medically necessary procedures or the money to pay for large co-payments. We need more studies like this one to understand the realities, both the benefits and costs, of not having “Universal Health Care”. Unfortunately, much of the “reality” is clouded by politicians looking for the quick vote by deliberately polarizing this issue.” — S.D. Agnello, consultantÂ
