Uninsured U.S. Residents Will Spend $30B Out-of-Pocket On Health Care This Year, While Receiving $56B In Uncompensated Care, Study Finds

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Health Insurance / Medical Insurance
Article Date: 26 Aug 2008 - 9:00 PDT

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Uninsured U.S. residents will spend about $30 billion out-of-pocket on health care this year, while other parties -- mainly the government -- will spend about $56 billion on uncompensated care for the uninsured, according to a study published online Monday in the journal Health Affairs, the Wall Street Journal reports. The report, by Jack Hadley of George Mason University and colleagues, found that government programs -- including Medicare, Medicaid and state and local programs -- pay about 75% , or $42.9 billion, of the amount uninsured individuals are unable to pay for services received. Some physicians and hospitals also donate time or forgo profit to care for low-income residents, and in some cases private donations cover the costs.

The report defined uncompensated care as the difference between the amount the uninsured paid and how much health care providers would have received if the patients had been privately insured.

Hadley said that uncompensated care does not necessarily translate into higher insurance premiums for private plan members as some believe, the Journal reports. He said unfunded care will have a "very small" impact on premiums, adding, "It's more through taxes than private insurance bills."

The report found that the total additional cost to the health system of covering all uninsured U.S. residents in 2008 would be $122.6 billion, driven by the fact that insured people tend to use more health care services than the uninsured. Health care spending accounted for 16.3% of gross domestic product in 2007, or about $2.2 trillion, and this portion could almost double in 10 years, according to federal data (Zhang, Wall Street Journal, 8/25).

Free access to the study, prepared for the Kaiser Family Foundation's Commission on Medicaid and the Uninsured, is available online.

American Public Media's "Marketplace" on Monday included coverage of the report. The coverage included comments from Hadley (Jablonski, "Marketplace," American Public Media, 8/25).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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