Uncompensated Care Costs for the Uninsured Will Reach $41 Billion in 2004, Study Finds
Uninsured U.S. residents will incur nearly $41 billion in uncompensated care in 2004 but will receive only about half as much care as those who have insurance, according to a new study from the Kaiser Commission on Medicaid and the Uninsured, the Denver Post reports (Austin, Denver Post, 5/11). The study, by Urban Institute researchers Jack Hadley and John Holahan, updates previous KCMU reports and measures the direct cost of care if all the uninsured were provided coverage and used the health care system at rates comparable to the insured population. The study reflects the potential increase in overall health spending directly attributable to the uninsured, but it does not take into account additional costs that could be incurred through major health coverage proposals. The study estimates that medical costs for all uninsured U.S. residents could reach $125 billion in 2004, with $41 billion of that total uncompensated. More than 25% of the total cost of care for the uninsured is paid out-of-pocket by patients, while the remaining 42% is paid by private and public insurance for those who have health coverage for part of the year, the study says (KCMU release, 5/10). Eighty-five percent -- or $35 billion -- of the $41 billion in uncompensated care will be paid for by governments, according to the study (Denver Post, 5/11). The federal government will cover about 66% of the $35 billion, and state and local governments will cover the rest. The study states that per capita spending for those who are uninsured for 2004 is expected to remain about 55% of what medical spending is for a full-year insured person -- $1,629 compared with $2,975 (KCMU release, 5/10). The U.S. economy could lose about $103 billion in productivity this year because the uninsured get less medical care and are sick more often than those who are fully insured, according to the study (Bloomberg/Dallas Morning News, 5/10).
The study estimates that providing full-year coverage to all 44 million uninsured people in the United States would increase medical spending by $48 billion in 2004 dollars (CongressDaily, 5/10). The increase would bring total medical spending on the uninsured to $173 billion, the study says. According to the study, shifting $48 billion from other areas of spending -- for a total of 0.4% of the U.S. gross domestic product -- would increase personal health care spending by less than 3% (KCMU release, 5/10). Currently, the United States' health spending totals $1.7 trillion, or about 15% of GDP (Bloomberg/Dallas Morning News, 5/10).
The study states, "When one considers the modest share of this spending to the nation's economy and the long-term economic benefit of good health, $48 billion appears to be a sound investment" (KCMU release, 5/10). Hadley said, "The issue is one of political will. Expanding insurance coverage is clearly worth it from a societal point of view" (Walsh, New Orleans Times-Picayune, 5/11). Diane Rowland, executive director of KCMU, said, "Leaving 44 million Americans uninsured exacts a substantial price on society as well as individuals, while covering the uninsured would improve their health care without generating large increases in overall spending" (Gralla, Reuters, 5/10). Jack Meyer, president of the Economic and Social Research Institute, said that addressing the issue of the uninsured could require tax increases or higher costs for employers (Snider, Bloomberg/Arizona Republic, 5/11). A Senate Republican task force on Tuesday is expected to release policy recommendations for providing coverage to the uninsured, CongressDaily reports (CongressDaily, 5/10). The study is available online.
NPR's "Tavis Smiley Show" on Monday -- the first day of "Cover the Uninsured Week," a media campaign led by the Robert Wood Johnson Foundation that will run from May 10-May 16 to raise awareness about uninsured people in the United States -- included an interview with California Endowment President and CEO Dr. Robert Ross and Boston University Health Reform Program Co-Director Deborah Socolar. Ross and Socolar discussed the impact of the uninsured on those with health insurance, proposals by President Bush and presumptive Democratic presidential nominee Sen. John Kerry (D-Mass.) to reduce the number of uninsured in the United States and how minority groups are affected by the lack of health insurance coverage (Smiley, "Tavis Smiley Show," NPR, 5/10). The complete segment is available online in RealPlayer. In addition, a video with highlights of local and national coverage of "Cover the Uninsured Week" 2003 events and related TV dramas is available online in RealPlayer from RWJF.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.