Uninsured Health Care Spending: $30 Billion Out of Pocket

There is a new report from researchers at George Mason University in Fairfax, VA, and the Urban Institute think tank in Washington, D.C. The findings are disturbing. Discussions about health care costs are generally an unsettling course of conversation these days. The dollar signs seem to keep mounting up.

Jane Zhang of The Wall Street Journal reports:

Americans who lack health insurance will spend about $30 billion out of pocket on medical care this year, but others -- mainly the government -- will end up covering another $56 billion in costs, according to a new study.

A grand total of $86 billion? That is quite a pretty penny. The health care equation is most certainly one that tends to produce and incredible amount of dollar signs. Let's take a look at a bit more detail:

The new study estimates the government pays 75%, or $42.9 billion, of the amount uninsured patients can't pay -- through Medicaid, the federal-state health-insurance for the poor and Medicare, the federal program for the elderly and disabled, as well as state and local taxes.

So if the government is paying, that means the money is ultimately coming out of the pockets of the taxpayers. State and local taxes are just the beginning. The other programs listed above all derive their revenue from the tax base as well.

There are a huge variety of factors that play into the final cost of any health care procedure, payment rates tend to fluctuate according to the method by which they are negotiated. The complexity of the issue is succinctly set forth later in Ms. Zhang's article:

Complicating the measure: Some doctors and hospitals donate time and forgo profit to cover poor people, and in some cases private donations cover the costs. Just how much money doctors and hospitals lose in caring for the uninsured is difficult to pin down, partly because group plans often negotiate lower payment rates than other consumers are billed. For this study, Mr. Hadley of George Mason University defined uncompensated care as the difference between how much the uninsured paid and what the providers would have received had those patients been privately insured.

So the net end result, according to the study, is that the majority of the monies used to defray the health care costs of the uninsured end up showing vastly more of an impact on our taxes than on the insurance premiums of those with private policies.

It is predicted that this report in conjunction with the two being released by the Census Bureau today will re-energize the debate about health care reform and health care costs. The Census Bureau reports will focus on income, poverty and the uninsured, and are sure to bring more attention to the issues covered here.

SOURCE: "Uninsured to Spend $30 Billion, Study Says" 08/25/08
photo courtesy of Saad.Akhtar, used under its Creative Commons license