Insured bear burden for uninsured

A new study looks at the price of subsidizing health care costs.
Thursday, June 16, 2005 | 12:00 a.m. CDT; updated 4:03 p.m. CDT, Saturday, July 19, 2008

In 2004, unpaid medical bills cost MU Health Care $40.5 million. Jennifer Coffman, MU Health Care media relations coordinator, said the bills are the result of uninsured patients who seek treatment and are then unable to pay.

According to a national study released last week by Families USA, 765,000 Missourians, or 13.3 percent of the population, will be uninsured in 2005. The Missouri Department of Social Services’ Division of Medical Services reports that the value of hospital care provided in Missouri to uninsured patients in 2004 was $335 million.

These numbers will likely increase because the 2005 budget approved by the Missouri General Assembly included one of the largest Medicaid cuts in the country. More than 90,000 Missourians are expected to lose all or part of their Medicaid benefits, which places an even greater burden on hospitals that treat uninsured patients.

Teaching hospitals such as MU Health Care’s University Hospital bear the brunt of these costs because they treat patients regardless of ability to pay or insurance status. MU Health Care’s loss represented 8.5 percent of its net revenue, said Jeff Hoelscher, media relations specialist for MU Health Care.

Still, MU Health Care made a profit in 2004. Each year the estimated cost of uncompensated care is budgeted into the hospital’s operating cost, Hoelscher said.

“Uncompensated care is a factor which increases the cost of health care for those paying for clinical services,” Hoelscher said.

Because insurance companies then pay more per patient, they raise premiums for their customers, said Brent Butler, director of government affairs for the Missouri Insurance Coalition. On average a family with health insurance in the U.S. shells out an additional $922 per year to subsidize health care for the uninsured, the Families USA study reported.

Missouri, whose residents pay an average of $291 per family in extra premiums, is ranked 49th in terms of expense. The most costly state is New Mexico, where insured patients pay an additional $1,800 per year in insurance premiums to cover the cost of the uninsured. By 2010, the study estimates that Missourians will pay $609 to cover the cost of uninsured patients. Kathleen Stoll, author of the study, said the actual cost is likely to increase even further.

“I’m confident that with the Medicaid cuts, there will be more people without insurance and premiums will rise even more,” Stoll said.

The rising cost of premiums makes it less likely that those dropped from Medicaid will be able to pay for private insurance. It will result in more unpaid bills for hospitals and even higher prices for consumers.

“It’s a vicious cycle,” Stoll said.

The study estimates that uninsured patients are able to pay only a third of the cost of health care out of pocket. Part of the remaining cost is covered by government programs, but almost two-thirds of the price, or $29 billion a year, is left unpaid.

Butler said it is common for hospitals to increase fees for the insured to cover the cost of treating the uninsured.

“When a person comes to the emergency room, they get taken care of and the doctors and hospitals have to recoup those costs some way,” Butler said. “That’s just the nature of health care in this country.”

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