UCLA Study Examines Cost of Providing Health Insurance to State Residents

Providing health coverage for California's 6.3 million uninsured residents would cost about $7.4 billion and could "stabliliz[e]" residents' health spending, according to a University of California-Los Angeles Center for Health Policy Research study, the Los Angeles Daily News reports (Pondel, Los Angeles Daily News, 5/12). Researchers at the UCLA center analyzed data from the 2001 California Health Interview Survey and the 1998-2000 Medical Expenditure Panel Survey, and found that the total amount of annual direct spending on health care for residents ages 65 and younger is approximately $61.8 billion. Direct health care expenditures for the uninsured in California total $7.4 billion per year, according to the study (UCLA Center for Health Policy Research release, 5/10). Researchers also estimated that adult Californians will spend $2,793 on health insurance this year and that uninsured residents will spend about $963 out-of-pocket for health services. In addition, researchers estimate the cost to insure children is approximately $1,429 per year, compared with an out-of-pocket cost of $726 per year for health services for uninsured children.

Gerald Kominski, professor at the UCLA center and co-author of the study, suggested that the state more efficiently utilize public health insurance programs such as Medi-Cal. He also proposed giving tax benefits to business owners who could not otherwise afford to offer health insurance to their employees. The study states that the number of uninsured state residents could be reduced by a law (SB 2) that would require some employers to provide health coverage to employees or pay into a state fund to provide such coverage (Los Angeles Daily News, 5/12). Under SB 2, scheduled to take effect Jan. 1, 2006, employers with 200 or more employees will have to provide health insurance to workers and their dependents by 2006 or pay into the state fund. Employers with 50 to 199 employees will have to provide health insurance only to workers by 2007. The law will exempt employers with fewer than 20 employees. The law also will exempt employers with 20 to 49 employees unless the state provides them with tax credits to subsidize the cost of health insurance for workers (California Healthline, 5/7). Study authors noted that the cost of complying with laws like SB 2 "may be more affordable if the state can find mechanisms for redirecting current sources of public and private expenditures on behalf of the uninsured" (UCLA release, 5/10). The study and release are available online. Note: You must have Adobe Acrobat Reader to access the study and release.

Additional information on SB 2 is available online.