Study: Insured Paying Higher ‘Hidden Tax’ For Uninsured Health Care

The average insured family pays an extra $1,017 in premiums each year to cover the cost of health care for the uninsured, according to a new study from Families USA, Reuters reports. Individuals paid an extra $368.  These "hidden health costs" costs accrue when "doctors, hospitals and other health providers try to recover the cost of uncompensated care by increasing charges for those with private insurance."  Medicare and Medicaid rules "make it difficult for providers to pass on uncompensated care costs" to the government insurance programs, so "the cost shift was borne almost entirely by private insurers."

In 2008, the uninsured "received about $116 billion in care."  Of that amount, they paid 37% out-of-pocket, and "government programs and charities paid for another 26 percent." The remaining $42.7 billion was "passed on to the insured in the form of higher prices for their care," the study found.  The "so-called 'hidden health tax'" has increased from 2005, when Families USA conducted its last study.  At that time, families paid an extra $922 in premiums and individuals an extra $341 (5/28).

Ron Pollack, the executive director of Families USA, warns that the numbers are likely to keep increasing in the recession, the AP reports.   "As more people join the ranks of the uninsured, the hidden health tax is growing," Pollack said, adding that American businesses and families "therefore have a clear financial stake in expanding health care coverage" (Werner, 5/28).

USA Today adds that the "the so-called hidden tax is increasingly becoming a talking point as proof that the U.S. health care system needs to be fixed," including recent mentions by Senate Finance Committee Chairman Max Baucus (D-MT), Health and Human Services Secretary Kathleen Sebelius and California Gov. Arnold Schwarzenegger (Kim, 5/28).

A second Reuters article cites a recent study by the Robert Wood Johnson Foundation finding that "the number of uninsured Americans could jump to more than 65 million in 10 years as healthcare costs more than double. The U.S. Census Bureau says about 46 million Americans are currently without insurance" (Charles, 5/28).