Spending and Usage of Healthcare by Americans without Health Care Coverage

By Stephen F Hightower MD FACP

“This Country will not be a good place for any of us to live in

unless we make it a good place for all of us to live in.” Teddy Roosevelt

fixingushealthcare.com

Monday, January 6, 2025

Dear Mr. President, Honorable Members of Congress and Distinguished Staff and Fine Citizens,        

Not surprisingly, persons without health insurance on average spend less for health care out of pocket because they use fewer and less costly services.  However, uninsured families pay for a higher proportion of their total health care costs out of pocket than do insured families. And they are more likely to have high medical expenses relative to income according to data from the National Institute of Health. 

Healthcare services received by the uninsured that do not pay for themselves are paid by multiple entities including: practitioners and institutions that serve the uninsured at no charge or reduced charges;  the federal government and state governments that support hospitals and clinics through appropriations or specific subsidies like those for Medicare and Medicaid; and donations from multiple other philanthropic groups.  Unfortunately, cost shifting of uncompensated care by both hospitals and physicians to other paying entities has been strongly suggested.

Uninsured children and adults are less likely to incur any health care expenses in a year compared to those with medical coverage.  This results in an economically better position for those without coverage, with health care costs less than half of the per capita health care spending for those under 65 who have coverage, but unfortunately results in higher morbidity and mortality because of using fewer health care services.  As anticipated, the greater number of services used by insured populations are associated with and contribute to their better health outcomes.

Comparison of actual events between the insured and uninsured show about half the number of inpatient hospital episodes for the uninsured, an equivalent number of ER visits for each group, half the number of office visits for the uninsured, and two thirds of the number of prescriptions for the uninsured.  This also unfortunately results in higher morbidity and mortality for the uninsured population.

In family settings, adults less than 65 without insurance had half the doctor visits as those with insurance.  Among children under 18 who were uninsured approximately 50% did not have an office visit for the entire year.  For those who did have office visits, it was 2.7 visits per year for the uninsured compared to 4.2 visits for children with health insurance.

A study from a Pennsylvania Program to expand health insurance for children showed an increase of care to 99% at 12 months through opportunities for those without health care insurance.  However, over time if parents are unable to obtain or maintain health insurance a significant drop in medical visits for the children was noted.

A striking reality for the poor who are uninsured, and who are unable to pay for received medical services, a collection process can be challenging.  Even if the hospital writes off the unpaid amount, the hospital can report them, and that information can remain on their credit report for up to 7 years. Also, in order for the hospital to write this off as bad dept they must demonstrate repeat efforts to collect the billing.  

When considering out of pocket costs for uninsured families, a study in the early 2000’s, noted that the average median income for a family without insurance was $20-29,000. The income for those with private insurance was $50,000.  Family studies showed 15% of those who had no health insurance had health care costs that exceeded 5% of their income and 4% of the uninsured families had expenses that exceeded 20% of their incomes, compared to 1% of those with private insurance.

When evaluating expenditures for a family without health insurance, on average, food, shelter, transportation, and clothing accounted for 85%.  Unfortunately, medical expenses lead to a lower standard of living and for a few they can mean bankruptcy. Older patients without healthcare insurance are more likely to experience illness and have fewer years to retirement to replace assets depleted by the cost of illness.  In the Health Retirement Survey, one in every 6 people aged 51-61 who were initially uninsured experienced a new diagnosis of cancer, heart disease, or stroke within the next 6 years.  Median non-housing wealth totaled $61,000 for those with health insurance and $19,000 for those without health insurance.

Public subsidies for health insurance coverage make health insurance more feasible.  Opportunities for healthcare that are currently available include public subsidies for health care coverage, yet many who are eligible are not enrolled.  Medicaid offers health insurance without paying a premium for those with very low income. SCHIP (State Children’s Health Insurance Program) provides matching funds to states for health insurance to families with children.  SCHIP for children limits cost sharing to less than 5 percent. Unfortunately, enrollment in Medicaid is still far less than it could be as is the SCHIP plan noted above. The lack of coverage entails both health and financial losses within the family and should be encouraged by primary care givers.

Obviously, there are likely adverse consequences for persons who do not have health insurance, from not obtaining preventive and regular chronic disease care.  However the use of services must be evaluated per family with the monetary costs, versus the physical costs, which is a very challenging process.  Of some importance is knowledge that the costs of uncompensated care provided to those without coverage do not represent new economic costs attributable to the non-insurance per se but are instead transfers of resources from public and private sources to those receiving health care.  The best estimate of the value of uncompensated health care services to persons who lack health insurance for a year based on potentially avoidable hospitalization and costs of inefficient or inappropriate health care services where care is provided too late, or in inappropriate settings, is approximately $35 billion annually which is about 2.8% of total national spending for personal health care services.

There are multiple federal, state, and local government programs involved in the provision of personal health care services to underserved and vulnerable populations, including those for Americans who lack health insurance.  These include community health centers along with specific programs of the Federal Bureau of Primary  Health Care.  Examples include: The Bureau of Primary Health Care (BPHC) funds nearly 1,400 health centers. They provide affordable, accessible, and high-quality primary health care to underserved communities at over 15,500 sites.  Maternal and Child Health Clinics and services with 1,128 health centers operate 8,500clinics throughout the United States; National Health Services Corps which supports 17,000 primary care medical, dental, and mental health providers thru scholarship payback opportunities in remote sites; HIV/AID Care with the national HIV/AIDS strategy road map for ending HIV in the US by 2030 has nationwide services; The Indian Health Service, is an agency within Health and Human Services, which is responsible for providing federal health services to American Indians and Alaska natives with care in 37 states to 2.2 million Indians, with 26 hospitals, 59 health centers and 32 clinics; Department of Veterans Affairs provides hospitals, clinics, treatment for toxin exposures, mental health, disability evaluations, nursing home options, transportation, and dialysis. Local Health Departments emphasize women infants and children care; provide dispersed public health offices in each state; and deal with environmental public health issues and often review  Long Term Care sites.  The estimate of expenditures for care provided yearly to the uninsured from community health and the other above providers of direct care is $7.11 billion of which the VA accounts for at least 50%.

Physicians also assist in providing uncompensated care by waiving or reducing their fees to uninsured patients and volunteering their time in free clinics or similar settings.  An American Medical Association survey reported that physicians provided about equal amounts of reduced-price and free care in the late 1990’s and that trend appears to continue today.  Unlike hospitals and publicly supported clinics, physicians and others in individual and small-group practices usually do not receive specific subsidies for uncompensated care.  Based on surveys done by the AMA, with a baseline of $105 per hour income for practitioners, and a breakdown of charity care into free care and reduced fee care provided to uninsured patients, an estimated $4.5 billion in physician-provided charity care was made. It is anticipated that these numbers have remained similar over time.

Respectfully submitted,

Stephen F Hightower MD FACP

fixingushealthcare.com

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