Washington, D.C. - Premiums for employer-provided family health insurance will cost, on average, an extra $922 in 2005 to cover the unpaid expenses of health care for the uninsured, according to a report released today that quantifies such costs for the first time. These added costs account for one out of every $12 spent for employer-provided health insurance.
The report, issued by the health consumer organization Families USA, projects that these costs will rise to $1,502 in 2010.
According to the report, health insurance premiums for family coverage in six states will be at least $1,500 higher in 2005 due to the unpaid cost of health care for the uninsured. These states are New Mexico ($1,875); West Virginia ($1,796); Oklahoma ($1,781); Montana ($1,578); Texas ($1,551); and Arkansas ($1,514).
"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," said Ron Pollack, Executive Director of Families USA. "The stakes are high both for businesses and for workers who do have health insurance because they bear the brunt of costs for the uninsured."
By 2010, there will be 11 states in which employer-provided family health coverage will cost more than $2,000 extra to pay for health services to the uninsured. These states are New Mexico ($3,169); West Virginia ($2,940); Oklahoma ($2,911); Texas ($2,786); Arkansas ($2,748); Florida ($2,248); Alaska ($2,248); Montana ($2,190); Idaho ($2,152); Washington ($2,144); and Arizona ($2,028).
"These extra costs place unacceptable burdens on all families, as well as our small businesses, and our medical providers," said Governor Kathleen Sebelius (D-KS). "We must find affordable ways to cover more workers and their families. States must work with the federal government to make such coverage a reality."
"Today's small businesses often face the harsh choice between ending employee health coverage or facing bankruptcy," said U.S. Senator Gordon Smith (R-OR). "Expanding health insurance will not only help millions of needy Americans, but will also lower health costs for everyone."
The Families USA report found that approximately one-third (35 percent) of the health care costs incurred by uninsured people are paid by the uninsured themselves. It is the remaining costs that are generally considered "uncompensated care."
Of those "uncompensated care" costs, a portion is picked up by federal, state, and local government sources. The remaining costs are shifted and added on to the insurance premiums for people who have health coverageand it is this hidden cost shift that the new report calculates for the first time.
The cost of health care provided to people without insurance that is not paid by the uninsured themselves will exceed $43 billion nationally in 2005. In 11 states this "uncompensated care" will exceed $1 billion in 2005. These states are California ($5.8 billion); Texas ($4.6 billion); Florida ($2.9 billion); New York ($2.7 billion); Illinois ($1.8 billion); Ohio ($1.4 billion); Pennsylvania ($1.4 billion); North Carolina ($1.3 billion); Georgia ($1.3 billion); New Jersey ($1.2 billion); and Michigan ($1.1 billion).
"This report underscores the importance of strengthening and protecting public programs such as Medicaid that are the health safety net for millions of Americans," said Pollack. "Medicaid cuts would only force more and more families into the ranks of the uninsuredthereby increasing insurance premiums for everyone who has health coverage."
The Families USA report was based on data compiled by Dr. Kenneth Thorpe, Robert W. Woodruff Professor and Chair of the Department of Health Policy and Management, Rollins School of Public Health, Emory University, and the data are derived from the U.S. Census Bureau, the federal Agency for Healthcare Research and Quality, the National Center for Health Statistics, and other sources.
Report introduction l Report findings l pdf of report
