Uncompensated care doesn't come free

Much of the cost of providing care to the uninsured is passed on to people who pay for health insurance.

By Joel B. Finkelstein, AMNews staff. June 27, 2005.

Washington -- Uninsured patients run up tens of billions of dollars in unpaid medical bills every year, much of which is passed on to those with health insurance, according to a new report from Families USA.

The average family pays $922 and individuals $341 more a year in health insurance premiums to help subsidize the cost of providing uncompensated care to the uninsured, the study found.

"The large and increasing number of uninsured Americans is no longer simply an altruistic concern on behalf of those without health coverage but a matter of self-interest for everyone. The stakes are high both for businesses and for workers who have health insurance because they bear the brunt of the cost for the uninsured," said Ron Pollack, executive director of Families USA.

In 2005, uninsured patients will rack up an estimated $43 billion in unpaid medical bills. One-third of that amount is picked up by federal, state and local governments, but the rest is shifted to the insured through higher plan premiums, the study found.

Wide variation exists among the states. For example, the added cost to families' premiums exceeds $1,500 a year in six states -- Arkansas, Montana, New Mexico, Oklahoma, Texas and West Virginia. By comparison, families in states such as Alabama, Connecticut, Iowa, Massachusetts and Minnesota pay less than $500 in additional premiums, while Rhode Islanders pay only $50 more per family.

Those states with high extra costs generally have more uninsured individuals and also tend to have fewer residents covered by public insurance programs. They also have the highest levels of uncompensated care.